IB 200 Discussion Notes

IB 200 Discussion Notes - -EX: suppose you imported shoes...

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IB 200 Discussion 9/29 - current account: covers export, imports, and aid - capital account: assets (foreign and domestic) - tracking cash flows: credits (+) and debits (-) - balance of payments must equal 0 - you need to say you earned $75,000 for services but then debit $75,000 for services in assets abroad because it is in the form of foreign currency
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Unformatted text preview: -EX: suppose you imported shoes from Italy worth $35,000, how would you represent it on your Balance of Payments? Now, suppose you set up a shoe factory in Italy for $3,000,000? Credits Debits-35,000 Import Merchandising Goods 3,000,000 Investment Income 35,000 Foreign Assets in the US 3,000,000 US assets abroad Balance of Payment...
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