opinion on Outward-Looking. Why?(15 points) Chines Import-Substitution o nsactio

Question

opinion on Outward-Looking. Why?(15 points) Chines Import-Substitution o nsactions is entered into with double entry bookkeeping:(15 points) a $1000 typewriter from an Italian 2. Indicate how each of the following internationa Italian company deposits the S1000 in its account at He places the charge on his credit card. of a developing nation as part of the U.S. aid program. foreign bank balances in U.S. down his bank balances in the U.S. the US balance of payment ent a. A U.S. citizen buys ty b. A U.S. resident visits London and spends $200 on hotel, c. The U.S. government gives a U.S bank balance of $1 d. A U.S. resident purchases a foreign stock of $400 and e. A foreign investor purchases Citibank in N York of $100 to the govenment pays by increasing $300 of U.S. treasury bills and pays by drawing

Explanation / Answer

2) All transactions enter balance of payment twice, once a debit and second a credit.

a) it enters US CA with the -1000 as it is gone to other country.

+1000 enters US financial account as it is deposited in US bank.

b) it shows up as -200 in US CA and as +200 in US financial account.

c) It enters as -1000 in US capital account and as +1000 in US financial account. All outflows of capital is substrated from capital account and added to financial account.

d) it shows up as -400 in financial account and as +400 as US financial account

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