Question 20.19

9. How would the following transactions be categorized in the U.S. balance of payments accounts? Would they be entered in the current account (as a payment to or from a foreigner) or the financial account (as a sale of assets to or purchase of assets from a foreigner)? How will the balance of payments on the current and financial accounts change?

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Data from: IMF; Bureau of Economic Analysis.

  1. A French importer buys a case of California wine for $500.

  2. An American who works for a French company deposits her paycheck, drawn on a Paris bank, into her San Francisco bank.

  3. An American buys a bond from a Japanese company for $10,000.

  4. An American charity sends $100,000 to Africa to help local residents buy food after a harvest shortfall.