When natural disasters like a hurricane, tsunami, or earthquake occur in other countries of the world, Americans donate to help the victims of such disasters. These donations A) Are part of export services recorded in the balance of payments account B) Are part of import services recorded in the balance of payments account C) Are part of net transfers recorded in the balance of payments account
When natural disasters like a hurricane, tsunami, or earthquake occur in other countries of the world, Americans donate to help the victims of such disasters. These donations A) Are part of export services recorded in the balance of payments account B) Are part of import services recorded in the balance of payments account C) Are part of net transfers recorded in the balance of payments account
Chapter20: International Finance
Section: Chapter Questions
Problem 1.1P
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When natural disasters like a hurricane, tsunami, or earthquake occur in other countries of the world, Americans donate to help the victims of such disasters. These donations
A) Are part of export services recorded in the balance of payments account
B) Are part of import services recorded in the balance of payments account
C) Are part of net transfers recorded in the balance of payments account
Expert Solution
Step 1
The balance of payments (BoP) keeps track of all economic exchanges of goods, services, and assets between a nation and the rest of the globe over a given period, often a year. It can be described as the nation's systematic accounting balance sheet, which contains both debit and credit activities. It focuses on all of the exports and imports of commodities and services throughout a certain period. It assists the government in analyzing the potential for export growth in a given industry and developing policies to facilitate such growth.
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