The purchases of goods and assets by foreign residents from domestic residents are ________ because they are a source of foreign exchange.________ increase the supply of foreign money in the foreign exchange market.

Question

Quizplus · Accepted Answer

Credit transactions are correct because when foreign residents purchase goods and assets from domestic residents, it results in an inflow of foreign currency, which is recorded as a credit in the balance of payments.

The Purchases of Goods and Assets by Foreign Residents from Domestic