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1. How would each of the following transactions show up on the U.S balance of payments accounts? Identify the current account balance, financial account balance, and reserve balance?  (a) An American company sells $30,000 worth of machinery to a British company. (b) an American woman visits her husband in Japan. She spends $5,000 in Japan before returning to the United States. (c) the US Red Cross sends $20,000 worth of flood-relief goods to Chile; (d) an American purchases $5,000 worth of French bonds; (e) a US bank lends $10,000 to a Canadian firm for 90 days.

1. How would each of the following transactions show up on the U.S balance of payments accounts? Identify the current account balance, financial account balance, and reserve balance?  (a) An American company sells $30,000 worth of machinery to a British company. (b) an American woman visits her husband in Japan. She spends $5,000 in Japan before returning to the United States. (c) the US Red Cross sends $20,000 worth of flood-relief goods to Chile; (d) an American purchases $5,000 worth of French bonds; (e) a US bank lends $10,000 to a Canadian firm for 90 days.

Brief Principles of Macroeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter13: Open-economy Macroeconomics: Basic Concepts
Section: Chapter Questions
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1. How would each of the following transactions show up on the U.S balance of payments accounts? Identify the current account balance, financial account balance, and reserve balance?

 (a) An American company sells $30,000 worth of machinery to a British company.

(b) an American woman visits her husband in Japan. She spends $5,000 in Japan before returning to the United States.

(c) the US Red Cross sends $20,000 worth of flood-relief goods to Chile;

(d) an American purchases $5,000 worth of French bonds;

(e) a US bank lends $10,000 to a Canadian firm for 90 days.

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