Explicit about which part of balance of payments is affected

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Show how each of the following would affect the U.S. balance of payments. For each case be explicit about which part of the Balance of Payments is affected (CA, KA, or FA) and by how much. For each transaction indicate in which of the 6 types (import/export of goods and services, import/export of factor services etc) it falls:

(a) A California computer manufacturer purchases a $50 hard disk from a Malaysian company, paying the funds from a bank account in Malaysia.

(b) A U.S. tourist to Japan sells his iPod to a local resident for yen worth $100.

(c) The U.S. central bank sells $500 million of its holdings of U.S.Treasury bonds to a British financial firm and purchases pound sterling foreign reserves.

(d) A foreign owner of Apple shares receives $10,000 in dividend payments, which are paid into a New York bank.

(e) The central bank of China purchases $1 million of export earnings from a firm that has sold $1 million of toys to the United States, and the central bank holds these dollars as reserves.

(f) The U.S. government forgives a $50 million debt owed by a developing country.

Reference no: EM131006337

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