Iii Balance Of Payments 4

III) Balance of Payments4. Explain how each of the following transactions generates two entries – a credit anda debit – in the American balance of payments accounts, and describe how each entrywould be classified:a. An American buys a share of German stock, paying by writing a check on anaccount with a Swiss bank.b. A tourist from Detroit buys a meal at an expensive restaurant in Lyons, France andpays with a credit card.c. A California winegrower contributes a case of cabernet sauvignon for a Londonwine tasting.d. A U.S.-owned factory in Britain uses local earnings to buy additional machinery

 

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