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Suppose an American Citizen Purchases a TV from Sony a Japanese

Question 87

Multiple Choice

Suppose an American citizen purchases a TV from Sony a Japanese company) . Sony then uses the dollars to purchases U.S. Treasury bonds. How will this transaction enter into the Japanese balance of payments?


A) The current account will decrease; the capital account will increase.
B) The current account will decrease; the capital account will decrease.
C) The current account will increase; the capital account will increase.
D) The current account will increase; the capital account will decrease.
E) There will be no net change in the current account or capital account.

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