1. Examine the following summary of the U.S. balance of payments for 2000 (in $ billion) and fill in the blank entries. Credits Debits 1,418.64 774.86 290.88 352.90 -1,809.18 -217.07 -367.68 -64.39 10.24 Current Account (1) Exports (1.1) Merchandise (1.2) Services (1.3) Factor income (2) Imports (2.1) Merchandise (2.2) Services (2.3) Factor income (3) Unilateral transfer Balance on current account Capital Account (4) Direct investment (5) Portfolio investment (5.1) Equity securities (5.2) Debt securities (6) Other investment Balance on capital account (7) Statistical discrepancies Overall balance Official Reserve Account 287.68 474.59 193.85 280.74 262.64 -152.44 -124.94 -99.74 -25.20 -303.27 0.30 -0.30 Source: IMF, International Financial Statistics Yearbook, 2001. 12. Explain how each of the following transactions will be classified and recorded in the debit and credit of the U.S. balance of payments: a. A Japanese insurance company purchases U.S. Treasury bonds and pays out of its bank account kept in New York City. b. A U.S. citizen consumes a meal at a restaurant in Paris and pays with her American Express card. c. An Indian immigrant living in Los Angeles sends a check drawn on his LA bank account as a gift to his parents living in Mumbai. d. A U.S. computer programmer is hired by a British company for consulting and gets paid from the U.S. bank account maintained by the British company. 1. Examine the following summary of the U.S. balance of payments for 2000 (in $ billion) and fill in the blank entries. Credits Debits 1,418.64 774.86 290.88 352.90 -1,809.18 -217.07 -367.68 -64.39 10.24 Current Account (1) Exports (1.1) Merchandise (1.2) Services (1.3) Factor income (2) Imports (2.1) Merchandise (2.2) Services (2.3) Factor income (3) Unilateral transfer Balance on current account Capital Account (4) Direct investment (5) Portfolio investment (5.1) Equity securities (5.2) Debt securities (6) Other investment Balance on capital account (7) Statistical discrepancies Overall balance Official Reserve Account 287.68 474.59 193.85 280.74 262.64 -152.44 -124.94 -99.74 -25.20 -303.27 0.30 -0.30 Source: IMF, International Financial Statistics Yearbook, 2001. 12. Explain how each of the following transactions will be classified and recorded in the debit and credit of the U.S. balance of payments: a. A Japanese insurance company purchases U.S. Treasury bonds and pays out of its bank account kept in New York City. b. A U.S. citizen consumes a meal at a restaurant in Paris and pays with her American Express card. c. An Indian immigrant living in Los Angeles sends a check drawn on his LA bank account as a gift to his parents living in Mumbai. d. A U.S. computer programmer is hired by a British company for consulting and gets paid from the U.S. bank account maintained by the British company
