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Consider Canada's Balance of Payments

Question 8

Multiple Choice

Consider Canada's balance of payments.If the Government of Canada were to sell some of its foreign-exchange reserves to a foreign government,the transaction would


A) represent the sale of an asset,and thus enter as a credit item in the official financing account.
B) represent the purchase of an asset from abroad,and thus enter as a debit item in the official financing account.
C) enter as a credit in the current account.
D) enter as a debit in the capital account.
E) enter as a credit in the capital-service account.

Correct Answer:

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