For the following question assume the following facts:
(1 ) Balance of Payments = 0 prior to the transactions.
(2 ) Person A (who lives in the United States) purchases an airplane from British Airways for $150,000.
(3 ) Person A pays with a check from his account at First Union Bank in the United States.
(4 ) British airways, since it will need dollars in 1 month, deposits the check at the Bank of England.
(5 ) Bank of England deposits the $150,000 at Commonwealth bank, which is located in the United States.
Due to the transactions above, what are the effects on the balance of payments?
A) -$150,000 due to import of good (current account debit)
B) +$150,000 due to import of good (current account credit)
C) -$150,000 due to deposit of Bank of England (capital account debit)
D) +$150,000 due to deposit of Bank of England (capital account credit)
E) No effect (150,000 current account debit and 150,000 capital account credit)
E
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A firm with substantial market power must be in a ____________ industry
a. monopoly or oligopoly b. perfectly competitive c. monopolistically competitive d. perfectly competitive or monopolistically competitive e. perfectly competitive or a monopoly
Figure 10-14
The economy's initial aggregate demand (AD0) and aggregate supply (SRAS0 and LRAS) curves are illustrated in . Which of the following is true?
a.
The profits of business firms are higher at I than J.
b.
H is a point of long-run equilibrium.
c.
Downward pressure on prices occurs at point G.
d.
Point F is consistent with long-run equilibrium.