When a U.S. resident increases her holdings of a foreign financial asset, this item is recorded as a:
A. credit entry in the U.current account.
B. debit entry in the U.current account.
C. credit entry in the U.capital account.
D. debit entry in the U.capital account.
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A deficit in the current account:
A. is accompanied by an equal amount of surplus in the financial account or in official international reserves.
B. tends to cause a deficit in the financial account.
C. does not affect the financial account or official international reserves.
D. is the result of increasing exports and decreasing imports.
Which of the following would tend to contribute to a U.S. current account surplus?
A. The United States makes a unilateral tariff reduction on imported goods.
B. The United States cuts back on American military personnel stationed in Japan.
C. U.tourists travel in large numbers to Asia.
D. Russian vodka becomes increasingly popular in the United States.
If a British businessman sells U.S. government securities to a U.S. buyer, how will this item be entered in the balance of payments?
A. It will appear in the trade account as an import.
B. It will appear in the trade account as an export.
C. It will appear in the financial account as an increase in foreign assets held by U.residents.
D. It will appear in the financial account as a decrease in the U.assets held by foreigners.
In the balance of payments, the statistical discrepancy is used to:
A. ensure that the sum of all debits matches the sum of all credits.
B. ensure that the value of imports equals the value of exports.
C. show how a balance-of-payments deficit is funded.
D. obtain an accurate account of a balance-of-payments surplus.