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Explain How Each of the Following Scenarios Will Affect the Current

Question 289

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Explain how each of the following scenarios will affect the current account, capital account, and official reserve accounts of each country.
A) Walmart buys toys from a Chinese toymaker, and the toymaker uses the proceeds to purchases shares of GE's stock in the United States.
B) Toyota exports cars to Malaysia and deposits the sales revenue in a Japanese bank.
C) An American tourist takes a vacation at a resort hotel in Italy, and the hotel uses the revenue to purchase wines from California.

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A) The U. S. current account will decrea...

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