III) Balance of Payments
4. Explain how each of the following transactions generates two entries – a credit and
a debit – in the American balance of payments accounts, and describe how each entry
would be classified:
a. An American buys a share of German stock, paying by writing a check on an
account with a Swiss bank.
b. A tourist from Detroit buys a meal at an expensive restaurant in Lyons, France and
pays with a credit card.
c. A California winegrower contributes a case of cabernet sauvignon for a London
d. A U.S.-owned factory in Britain uses local earnings to buy additional machinery