econ303-SP17assignment7.docx - Student name Sonoma State...

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Student name:____________________ Sonoma State University ECONOMICS 303 Department of Economics Florence Bouvet Assignment 7 – Due in lecture on 4/27 th at the beginning of lecture A) Show how each of the following would affect the US balance of payments. In each case identify which specific account is affected and whether the transaction is recorded as a debit or credit. These examples should lead to two entries in the US BOP. 1) A California computer manufacturer purchases a $50 hard disk from a Malaysian company, paying the funds from a bank account in Malaysia. 2) A foreign owner of Apple shares receives $10,000 in dividend payments, which are paid into a New York bank. 3) The US government forgives a $50 million debt owed by a developing country. 4) The US central bank sells $500 million of its holdings of US Treasury bonds to a British financial firm and purchases pound sterling foreign reserves.
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5) A US accountant is hired by British Petroleum for $200,000 in London. The accountant is paid by check from a account BP has with Bank of America in
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