A wealthy Japanese executive decides to buy a large amount of Canadian assets.Which account under balance of payments would be affected?

Question

Quizplus · Accepted Answer

The purchase of Canadian assets by a Japanese executive would fall under the category of foreign direct investment (FDI), which is a part of the Canadian financial account, as it involves a transfer of ownership of assets between residents of different countries. The current account records international transactions in goods and services, while the foreign reserves account records the country's holdings of foreign currencies and other assets. The exports account records only the country's exports of goods and services, and is not relevant to this scenario.

A Wealthy Japanese Executive Decides to Buy a Large Amount