D Question 1 1 pts In the U.S. balance of payments account, when a Japanese comp

Question

D Question 1 1 pts In the U.S. balance of payments account, when a Japanese company buys a U.S. software company, this transaction will be a: O A U.S. dollar inflow+) O A U.S. dollar outflow (-) O Included as part of net transfers O Included in the capital account Question 2 1 pts The following table contains hypothetical data for the U.S. balance of payments in a particular year. Answer the next question on the basis of this information. 1. Balance on goods and services: $585 billion 2. Net investment income: $88 billion 3. Net transfer: $213 billion Refer to the above data. The U.S. balance on current account is a: O deficit of $ 798 billion deficit of $710 billion surplus of $798 billion O O surplus of $710 billion

Explanation / Answer

1>A US dollar inflow

Reason

This is a cash inflow as in this transaction happens with the Japanese company paying to the US company. Thus, there is a cash inflow.

2> The current account is an important indicator of an economy's health. It is defined as the sum of the balance of trade, net income from abroad and net current transfers.

Thus, the answer is -585+88-213 billion = -710 billion

Thus, option b is right.

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