Suppose the McDonalds Corporation imports Canadian beef,paying for it by transferring the funds to a New York bank account kept by the Canadian beef producer.

Question

Quizplus · Accepted Answer

BIn international trade and balance of payments accounting, a payment made by an importer (in this case, McDonald's) to a foreign entity (the Canadian beef producer) is recorded as a debit in the importing country's (the United States) accounts. This is because the payment represents an outflow of funds from the country. Conversely, the receipt of funds by the seller (the Canadian beef producer) and the deposit of these funds into a bank account (even if it is in New York) represent an inflow of funds to the seller's country (Canada) and would be recorded as a credit in Canada's accounts. However, the question's focus seems to be on the U.S. perspective, and the deposit detail might be misleading. The key point is that from the U.S. perspective, McDonald's payment is a debit (an outflow), and from the banking perspective, deposits are generally recorded as credits in the depositor's account, but this is not directly relevant to the balance of payments context the question implies.

Suppose the McDonalds Corporation Imports Canadian Beef,paying for It by Transferring