1. Classify the following transactions for the U.S. balance of payments (with a credit and debit each)

	Credit	Debit
Current Account
Merchandise	outgoing	incoming
Services	provided by domestic country	provided to domestic country
Investment income	earned	paid
Unilateral transfer	incoming	outgoing
Capital account
Claims	owed by domestic country	owed to domestic country
Domestic assets abroad	decrease	increase
Foreign assets at home	increase	decrease

a) Suppose that a firm in the U.S. ships merchandise to an overseas buyer with the understanding that the price of $50 million is to be paid within 90 days.

b) Assume U.S. residents import merchandise valued at $65 million, making payment by transferring $10 million from balances that they hold in foreign banks and $55 million from balances held in U.S. banks.

c) Residents of the U.S. send gifts worth $1 million to their relatives abroad.

d) U.S. residents purchased $40 million in long-term bonds issued by foreign borrowers.

e) U.S. firms provide $10,000 of shipping services to foreign firms who pay for these services from accounts held in the U.S.

f) A U.S. firm pays dividend checks worth $1 million to foreign residents (several countries), all of whom deposit these checks in local banks.