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If someone could please explain step by step that would be great. Thanks!! 1- Suppose that home country A has the following transactions with foreign
If someone could please explain step by step that would be great. Thanks!!
1- Suppose that home country A has the following transactions with foreign countries (represented by foreign country B). For each transaction, indicate and explain the appropriate debit and credit entry in A's balance-of-payments accounts. (a) A firm in country A sells S6,000 of steel to a country B firm. Payment is made by the firm in B drawing down its checking account in a country A commercial bank. (b) Country A citizens give $1,000-worth of cash to country B relatives by writing checks on A-citizen bank accounts in country B. (c) An importer in country A buys $8,000 of apparel from a country-B supplier, paying for the goods by writing a check to be deposited into the B firm's bank account in a country A bank. (d) A citizen of country B buys a long-term bond of a company in country A. The buyer purchases the $5,000 bond by drawing down his/her checking deposit in a bank in A (e) A firm in country A purchases $3,000 of shipping services from a country B ocean freight carrier, paying for the services by drawing down bank deposits in B owned by the A firm. (f) A's central bank buys $2,000-worth of foreign currency holdings held in a B commercial bank by an A citizen. The central bank adds the foreign currency to its own commercial bank account in country BStep by Step Solution
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