Question 13 Suppose $100,000 of U.S. grown apples are sold to a Japanese grocery
ID: 1100297 • Letter: Q
Question
Question 13
Suppose $100,000 of U.S. grown apples are sold to a Japanese grocery firm. The sale of the apples are recorded in the balance of payments accounts for the United States as a (+) entry in the (Merchandise/Services/Income/Unilateral transfers/Financial) account and a (-) entry in the (Merchandise/Services/Income/Unilateral transfers/Financial) account.
Question 14
The balance on the income account can be interpreted as
the difference between assets sold to foreigners and assets purchased from foreigners.
the balance of trade.
net exports.
net aid to foreigners.
net factor income from abroad.
Question 15
Which of the following would lead to an increase in the current account balance (or reduction in deficit) in the United States, all else held constant? CHECK ALL THAT APPLY
An increase in U.S. purchases of Chinese goods.
An increase in Canadian purchases of U.S. goods.
An increase in profits earned by Toyota (a Japanese firm) from its U.S. based operations.
An increase in European travel to the United States.
the difference between assets sold to foreigners and assets purchased from foreigners.
the balance of trade.
net exports.
net aid to foreigners.
net factor income from abroad.
Explanation / Answer
13) The balance on the income account can be interpreted as net factor income from abroad
Reason: As net factor income from abroad is difference between income earned by citizens of the country in foreign and income earned by foreign residents in country
14) ans: II , III and IV
Reason:As in II exports increased, so current account balance increases as it contains term( exports-imports)
in III , as profit increases, it pays tax to US government increasing current account balance
in IV , as foreigners travel to US income comes under current account balance, so it affects current account balance and affect will be positive ,i.e increasing
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.