Suppose that a U.S. importer buys goods from a foreign firm and makes payment by drawing down its New York bank account and transferring the funds to the foreign exporter's bank account in the foreign country. In this situation, the credit entry in the U.S. balance of payments account is __________.
A) "decrease in U.S. short-term private assets abroad"
B) "increase in U.S. short-term private assets abroad"
C) "decrease in foreign short-term private assets in the United States"
D) "imports of goods"

Question

Quizplus · Accepted Answer

The credit entry is "decrease in U.S. short-term private assets abroad" because the U.S. importer's bank account in the U.S. is reduced, which is a decrease in U.S. assets held abroad.

Suppose That a U