Unit 7 Quiz

Each month, Ima Newhere, who recently arrived in the United States, sends half her paycheck to her sister in Poland.

• Current account - Debit

• Current account - Credit

• Capital/Financial account - Debit

• Capital/Financial account - Credit

BMW pays $1 million to a U.S. shipper for transporting cars from Germany to the United States.

• Current account - Debit

• Current account - Credit

• Capital/Financial account - Debit

• Capital/Financial account - Credit

A Chinese company sells $1 million worth of socks to the U.S. army.

• Current Account - credit

• Current Account - debit

• Capital Account - Credit

• Capital Account - Debit

Andre Prenoor, U.S. entrepreneur, invests $50 million to develop a theme park in Malaysia.

• Current Account - credit

• Current Account - debit

• Capital Account - credit

• Capital Account - debit

Harley-Davidson USA purchases $25 million in production machinery from a Japanese company.

• Current account - credit

• Current account - debit

• Capital/Financial account - credit

• Capital/Financial account - debit

Jorge Martinez from Spain buys a shopping center in Florida.

• Current account - Credit

• Current account - Debit

• Capital/Financial account - credit

• Capital/Financial account - debit

An Italian tourist paying for a night in a London hotel would appear on the UK balance of payments:

• current account - credit

• current account - debit

• capital/financial accounts - credit

• capital/financial accounts - debit

This account records flows of money from the purchase and sale of real estate and financial assets between countries.

• current account
• financial/capital account
• official reserves

This account records a nation's imports and exports of goods, services, net investment income, and net transfers.

• current account
• financial/capital account
• official reserves

How is the payment of interest on foreign loans recorded in the BoP?

• As an income debit in the current account
• As a service debit in the current account
• As a foreign investment debit in the financial account