show how each of the following would affect the US balance of payments. include a description...

show how each of the following would affect the US balance of payments. include a description of the debit and credit items, and in each case identify which specific account is affected (imports on goods and services, exports of assets, etc).

A U.S. book publisher sells $20,000 of books to a Chinese firm. the firm pays for the books by using its Chinese based credit card company.

Vlad, a Russian citizen, working in New York, earned $6,000 last year working at a factory owned by a US company

Expert Solution

In the case of US book publisher, the current account will get affected because exporting of merchandise goods is taking place. The US firm will get debited with $20,000 dollar worth of books and credited with equivalent Chinese Yuan ($20,000 worth Chinese Yuan in current exchange rate) I from the Chinese credit card company. The credit card company will have it's own form of settlement in their own country.

A Russian citizen earning $6,000 will be considered as domestic income of US but not in the national income of US. Part of this $6000 can go back to Russia in form of remittance which will be a unilateral transfer from the Current Account of BoP of US. The amount sent will be debited from the current Account of US. The sending of USD to Russia will create an equal amount of claim on Russian economy in form of claim on stock or any other purchase. This will be credited to US current account in BoP.

Two transactions always take place because Balance of Payments is a double entry book keeping system.

Rahul Sunny answered 1 year ago

Indicate how each of the following transactions is entered into the US balance of payments with...

Indicate how each of the following transactions is entered into the US balance of payments with double-entry bookkeeping: • A U.S. firm exports $500 of goods to an Australian retired man who pays with his bank account savings from his Australian Bank • A U.S. economics major purchases a travel service for $200 to Italy and pays it with money from his U.S. bank account • The U.S. government gives $100 from a US bank to Cuba to favor greater...

Please show the balance of payments equation. Does the US balance of payments have a deficit...

Please show the balance of payments equation. Does the US balance of payments have a deficit or surplus? Please explain. If China has a trade surplus, then how do they have a deficit in their capital account? If the US had an estimated trade deficit of $379 billion in 2013, please explain in the context of the international macroeconomic model (e.g., what is their GDP v. aggregate demand,...). If Y - Yd > 0, what happens to savings, the trade...

How would each of the following events affect the quantity of corn supplied in the US...

How would each of the following events affect the quantity of corn supplied in the US and how would the typical corn producer’s profit be affected in the short-term and long-term? a. The price of soybeans increases dramatically overnight i. Supply of corn ii. Short-term profit iii. Long-term profit b. The price of butter and salt fall dramatically overnight i. Supply for corn ii. Short-term profit iii. Long-term profit c. A new machine is introduced that is cheaper and more...

1. Explain and show (separately) on a graph how each of the following would affect the...

1. Explain and show (separately) on a graph how each of the following would affect the demand for calculators: a. Cell phones now have a calculator function included b. Every course begins to require use of a calculator c. The price for a calculator falls from $20 to $7 d. Consumers’ incomes increase, and calculators are a normal good

How would each of the following developments affect the exchange rate of the US dollar (state...

How would each of the following developments affect the exchange rate of the US dollar (state whether the US dollar will get stronger or weaker)? Support your answer discussing the effects on the demand and supply of a foreign currency or dollars and using appropriate diagrams. a. Increase in the expected inflation rate in the economies of US trading partners b. Increase in the expected future exchange rate (US $ is expected to grow stronger) c. Americans are traveling less...

How would each of the following affect national saving, investment, the current account balance, and the...

How would each of the following affect national saving, investment, the current account balance, and the real interest rate in a small open economy? An increase in the domestic willingness to save An increase in foreign government purchases

Explain briefly how each of the following transactions would affect a company’s balance sheet. Remember, assets...

Explain briefly how each of the following transactions would affect a company’s balance sheet. Remember, assets must equal liabilities plus owners’ equity before and after the transaction. a) Sale of used equipment with a book value of $300,000 for $500,000 cash. b) Purchase of a new $80 million building, financed 40 percent with cash and 60 percent with a bank loan. c) Purchase of a new building for $60 million cash. d) A $40,000 payment to trade creditors. e) A...

How each of the following changes will affect the real exchange rate (the number of US...

How each of the following changes will affect the real exchange rate (the number of US baskets per EU basket of goods/services): a.The relative demand of U.S. products decreases. b.The relative demand of U.S. products decrease

How would each of the following scenarios likely affect (that is, exacerbate (that is, make a...

How would each of the following scenarios likely affect (that is, exacerbate (that is, make a bad situation worse) or mitigate (that is, make it less painful or severe) the occurrence of a financial crisis (explain briefly): Fearing potential contagious effects, the IMF suggests that it stands ready to bailout a country which may face a financial crisis. b. The threat of an eventual intervention by the IMF demanding that the country that is about to face a financial crisis...

What is the balance of payments? Explain how s trade surplus in China with the US...

What is the balance of payments? Explain how s trade surplus in China with the US leads to a net capital outflow of investment from China to the US? Using the international macroeconomic model, show the model and describe the relation between output, spending, savings investment, trade balances, government budgets and capital investment across trading nations?

Question