A Japanese insurance company purchases U.S.government securities.From the perspective of the United States,the balance of trade with Japan will _____ and the balance of payments with Japan will _____.

Question

Quizplus · Accepted Answer

When a Japanese insurance company purchases U.S. government securities, it does not directly affect the balance of trade, as this transaction is a financial investment rather than a trade of goods or services. However, it does improve the balance of payments by increasing capital inflows from Japan to the United States.

A Japanese Insurance Company Purchases U