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Suppose a Chinese Citizen Buys a Box of Nestlé Kit

Question 81

Multiple Choice

Suppose a Chinese citizen buys a box of Nestlé Kit Kat candy bars from America and Nestlé decides to hold on to the Chinese currency. How will this transaction enter into the U.S. balance of payments?


A) as an increase in current account, as a decrease in capital account
B) as a decrease in current account, as an increase in capital account
C) as an increase in current account, as an increase in capital account
D) as a decrease in current account, as a decrease in capital account
E) There will be no net change in current account or capital account.

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