Change in U.S.-owned assets abroad 245.0 Change in foreign-owned assets in U.S.

Question

Change in U.S.-owned assets abroad 245.0 Change in foreign-owned assets in U.S. 100.0 (Balance of Payments) Explain where in the U.S. balance of payments an entry would be recorded for each of the following: A Hong Kong financier buys some U.S. corporate stock. A U.S. tourist in Paris buys some perfume to take home. A Japanese company sells machinery to a pineapple company in Hawaii. U.S. farmers gave food to starving children in Ethiopia. The U.S. Treasury sells a bond to a Saudi Arabian prince. A U.S tourist flies to France on Air France. A U.S. company sells insurance to a foreign firm. describe how the foreign exchange rate

Explanation / Answer

A) Hongkong person buys us corp stock

This will be recorded as stock is something that involves monetary payments

B) Perfume

Cant be recorded because transaction happened outside and person just bringing perfume

C) Hawaii company buying machinery

Recorded because monetary transaction is happening

D) Farmers donate

Recorded Aid is recorded in BOP

E) Sale of bond to saudi

Recorded it is debt from treasury, Certainly recorded

F) Air france us tourist flies to france

Recorded as payments were made to foreign airline

G) US firm sells insurance to foreign firm

Recorded as foreign firms remit money to buy such insurance.

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