When a U.S. importer buys 100,000 pairs of pants from a Hong Kong company, this transaction will represent a

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When a U.S. importer buys 100,000 pairs of pants from a Hong Kong company, this represents an import of goods, which is a debit on the current account of the U.S. balance of payments. The current account records transactions in goods and services, while the financial account records transactions in assets and liabilities. Therefore, this transaction does not affect the financial account, so options C and D are incorrect. Option A is incorrect because a credit on the current account would represent an export of goods or a surplus in the balance of trade.

When a US Importer Buys 100,000 Pairs of Pants from a Hong