international Economics

Chapter 13: Problem 3a,b,c,d,f (p.339 of textbook)

(International Economics: Theory and Policy, 10th edition by Krugman, Obstfeld, and Melitz)

This is the Textbook.
—————————————————

Explain how each of the following transactions generates two entries – a credit and a debit – in the American Balance of Payments Accounts, and describe how each entry would be classified.
(a) An American buys a share of German stock, paying by writing a check on an account with a Swiss Bank.

(b) An American buys a share of German stock, paying the seller with a check on an American Bank

(c) The Korean government carries out an official foreign exchange intervention in which it uses dollars held in a American Bank to buy Korean currencies from its citizens.

(d) A tourist from Detroit buys a meal at an expensive restaurant in Lyons, France, paying with a traveler’s check.

(f) A U.S.-owned factory in Britain uses local earnings to buy additional machinery.

international Economics

Chapter 13: Problem 3a,b,c,d,f (p.339 of textbook)

(International Economics: Theory and Policy, 10th edition by Krugman, Obstfeld, and Melitz)

This is the Textbook.
—————————————————

Explain how each of the following transactions generates two entries – a credit and a debit – in the American Balance of Payments Accounts, and describe how each entry would be classified.
(a) An American buys a share of German stock, paying by writing a check on an account with a Swiss Bank.

(b) An American buys a share of German stock, paying the seller with a check on an American Bank

(c) The Korean government carries out an official foreign exchange intervention in which it uses dollars held in a American Bank to buy Korean currencies from its citizens.

(d) A tourist from Detroit buys a meal at an expensive restaurant in Lyons, France, paying with a traveler’s check.

(f) A U.S.-owned factory in Britain uses local earnings to buy additional machinery.