Which one of the following items would be classified as a "debit" in country A's balance-of-payments accounts?
A) the receipt of investment income from abroad by a country A corporation
B) an increase in the size of a bank account held in a country A bank by a country B Citizen
C) consulting services provided by a country A citizen to a country B firm
D) an increase in size of a bank account held in a country B bank by a country A Corporation

Question

Quizplus · Accepted Answer

An increase in the size of a bank account held in a country B bank by a country A corporation would be classified as a debit in country A's balance-of-payments accounts because it represents an outflow of capital from country A to country B. This is because the funds are leaving country A's economy to be deposited in another country's bank, reflecting a decrease in country A's foreign assets.

Which One of the Following Items Would Be Classified as a "Debit