The payment of a dividend by a foreign company to an American stockholder represents
A)a debit in the U.S. capital account.
B)a credit in the U.S. current account.
C)a credit in the U.S. official reserve account.
D)a debit in the U.S. current account.

Question

Quizplus · Accepted Answer

The payment of a dividend by a foreign company to an American stockholder would represent a credit in the U.S. current account because it represents an inflow of income from abroad. It is not a capital transaction, so it would not affect the U.S. capital account or the official reserve account. Therefore, option B is the correct answer.

The Payment of a Dividend by a Foreign Company to an American