Balance of Payments

Balance of Payments - Balance of Payments - Examples 1. IBM...

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Balance of Payments - Examples 1. IBM sells computers for $100,000 to a Mexican importer. The importer will pay IBM next year. Therefore, IBM has now a credit versus the Mexican importer. Current Account 100,000 Capital and Financial Account (non-official) 100,000 Capital and Financial Account (official) The top section is the Current Account . The bottom section is the Capital Account , divided in two subsections: capital operations conducted by non-official institutions and capital operations conducted by official institutions (central banks). 2. General Motor sells cars for $200,000 to a car dealer in Canada. In exchange the Canadian dealer gives a check denominated in Canadian dollars. As soon as GM receives the check it converts it in US dollars at the central bank (official institution). Current Account 200,000 Capital and Financial Account (non-official) Capital and Financial Account (official) 200,000
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3. A US retailer buys clothing from Gucci for $150,000 which pays by issuing a check
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Balance of Payments - Balance of Payments - Examples 1. IBM...

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