Describe how each of the following transactions affects the U.S. Balance of Pay- ments. (Recall that each transaction gives rise to two entries in the Balance-of-Payments Accounts.) [Note: these questions are slightly different to the most recent version of the S-GUW text- book. You can look at both. More questions are also available in Appleyard and Field] 1. An American university buys several park benches from Spain and pays with a $120 000 check. 2. Floyd Townsend, of Tampa Florida, buys 5,000.00 dollars worth of British Airlines stock from Citibank New York, paying with U.S. dollars. 3. A French consumer imports American blue jeans (US$ 100.00) and pays with a check drawn on a U.S. bank in New York. 4. An American company sells a subsidiary in the United States and with the proceeds buys a French company (both worth US$ 1.00). 5. A group of American friends travels to Costa Rica and rents a vacation home for $2,500. They pay with a U.S. credit card. 6. The United States sends medicine, blankets, tents, and non-perishable food worth 400 dollars to victims of an earthquake in a foreign country. The following two transactions involve a component of the balance of payments that we have ignored because it is quantitatively insignificant (for the U.S.). 1 7. A billionaire from Russia enters the United States on an immigrant visa (that is, upon entering the United States she becomes a permanent resident of the United States.) Her wealth in Russia is estimated to be about 200 U.S. dollars. 8. The United States forgives debt of $500 to Nicaragua.
Describe how each of the following transactions affects the U.S. Balance of Pay- ments. (Recall that each transaction gives rise to two entries in the Balance-of-Payments Accounts.) [Note: these questions are slightly different to the most recent version of the S-GUW text- book. You can look at both. More questions are also available in Appleyard and Field] 1. An American university buys several park benches from Spain and pays with a $120 000 check. 2. Floyd Townsend, of Tampa Florida, buys 5,000.00 dollars worth of British Airlines stock from Citibank New York, paying with U.S. dollars. 3. A French consumer imports American blue jeans (US$ 100.00) and pays with a check drawn on a U.S. bank in New York. 4. An American company sells a subsidiary in the United States and with the proceeds buys a French company (both worth US$ 1.00). 5. A group of American friends travels to Costa Rica and rents a vacation home for $2,500. They pay with a U.S. credit card. 6. The United States sends medicine, blankets, tents, and non-perishable food worth 400 dollars to victims of an earthquake in a foreign country. The following two transactions involve a component of the balance of payments that we have ignored because it is quantitatively insignificant (for the U.S.). 1 7. A billionaire from Russia enters the United States on an immigrant visa (that is, upon entering the United States she becomes a permanent resident of the United States.) Her wealth in Russia is estimated to be about 200 U.S. dollars. 8. The United States forgives debt of $500 to Nicaragua.
Chapter19: The International Monetary System: Order Or Disorder
Section: Chapter Questions
Problem 8DQ
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![Describe how each of the following transactions affects the U.S. Balance of Pay-
ments.
(Recall that each transaction gives rise to two entries in the Balance-of-Payments Accounts.)
[Note: these questions are slightly different to the most recent version of the S-GUW text-
book. You can look at both. More questions are also available in Appleyard and Field]
1. An American university buys several park benches from Spain and pays with a $120
000 check.
2. Floyd Townsend, of Tampa Florida, buys 5,000.00 dollars worth of British Airlines
stock from Citibank New York, paying with U.S. dollars.
3. A French consumer imports American blue jeans (US$ 100.00) and pays with a check
drawn on a U.S. bank in New York.
4. An American company sells a subsidiary in the United States and with the proceeds
buys a French company (both worth US$ 1.00).
5. A group of American friends travels to Costa Rica and rents a vacation home for $2,500.
They pay with a U.S. credit card.
6. The United States sends medicine, blankets, tents, and non-perishable food worth 400
dollars to victims of an earthquake in a foreign country.
The following two transactions involve a component of the balance of payments that we
have ignored because it is quantitatively insignificant (for the U.S.).
1
7. A billionaire from Russia enters the United States on an immigrant visa (that is, upon
entering the United States she becomes a permanent resident of the United States.)
Her wealth in Russia is estimated to be about 200 U.S. dollars.
8. The United States forgives debt of $500 to Nicaragua.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F87b53351-2067-4a4d-a81c-a5cf0ffaa5a8%2Feba53ede-7ae5-42f6-a5ec-c93e5226f28a%2Fp9xav5h_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Describe how each of the following transactions affects the U.S. Balance of Pay-
ments.
(Recall that each transaction gives rise to two entries in the Balance-of-Payments Accounts.)
[Note: these questions are slightly different to the most recent version of the S-GUW text-
book. You can look at both. More questions are also available in Appleyard and Field]
1. An American university buys several park benches from Spain and pays with a $120
000 check.
2. Floyd Townsend, of Tampa Florida, buys 5,000.00 dollars worth of British Airlines
stock from Citibank New York, paying with U.S. dollars.
3. A French consumer imports American blue jeans (US$ 100.00) and pays with a check
drawn on a U.S. bank in New York.
4. An American company sells a subsidiary in the United States and with the proceeds
buys a French company (both worth US$ 1.00).
5. A group of American friends travels to Costa Rica and rents a vacation home for $2,500.
They pay with a U.S. credit card.
6. The United States sends medicine, blankets, tents, and non-perishable food worth 400
dollars to victims of an earthquake in a foreign country.
The following two transactions involve a component of the balance of payments that we
have ignored because it is quantitatively insignificant (for the U.S.).
1
7. A billionaire from Russia enters the United States on an immigrant visa (that is, upon
entering the United States she becomes a permanent resident of the United States.)
Her wealth in Russia is estimated to be about 200 U.S. dollars.
8. The United States forgives debt of $500 to Nicaragua.
Transcribed Image Text:Transaction
Debits (-)
Amount
Credits (+)
1
3
4
7
8
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