Show (using credit/debit tables) how each of the following would affect the U.S. BOP. Include a description

Question:

Show (using credit/debit tables) how each of the following would affect the U.S. BOP. Include a description of the transaction being recorded, which specific account is affected (e.g., exports [EX], home financial account assets and the accompanying credit/debit entry.

a. A U.S. airplane manufacturer imports $600,000 in parts from a Canadian firm. It uses a U.S. bank account to pay for the parts.

b. The Bank of England (U.K. central bank) buys $2 million in U.S. Treasury bonds from an American securities firm.

c. An Italian tourist charges $400 to his MasterCard (issued by an Italian bank) for a hotel room in New York City.

d. A Chinese catering company purchases $30,000 in helium tanks from a U.S. welding firm. The Chinese catering company uses deposits from a bank in China.

e. A French firm forgives a $250,000 loan to an oil refinery located in Louisiana following a hurricane.

f. The United States donates $8 million in medical and food supplies to Lebanon following a month-long war.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

International Economics

ISBN: 9781319218508

5th Edition

Authors: Robert C. Feenstra, Alan M. Taylor

Question Posted: