The financial account in the U.S. balance of payments includes:
A. everything that is included in the current account.
B. payments of pensions to U.citizens who now live in foreign countries.
C. profits that Nissan of America sends back to Japan.
D. new U.investments in foreign countries.
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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.
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.