If a U.K. citizen removes funds from a London bank and places them in his/her bank account in the United States, this deposit into the United States is recorded as a __________ item in the U.S. balance-of-payments accounts. If, in a different transaction, a U.K. firm sells a good to a U.S. citizen, this U.K. export (U.S. import) of the good is __________ item in the U.S. balance-of-payments accounts.

Question

Quizplus · Accepted Answer

The deposit into the United States is recorded as a credit because it represents an inflow of capital to the U.S. The U.K. export (U.S. import) is recorded as a debit because it represents an outflow of money from the U.S. for the purchase of goods.

If a UK Citizen Removes Funds from a London Bank and Places