Question

General Motors issues $10 million of new bonds and sells them to residents of Mexico. This...

General Motors issues $10 million of new bonds and sells them to residents of Mexico. This transaction would be recorded on the U.S. balance of payments as a a) Capital account credit b) Financial account debit c) Financial account credit d) Capital account debit

Homework Answers

Answer #1

ANSWER :: (B) Financial Account Credit

=> Explanation ::

As General Motor Sell $10 Millions Of New Bonds so It Create A New Liability And Sell those Bonds To The Residents Of Maxico So This Transaction is Done By The U.S Based Company So In the United States Balance Of Payment This Transaction Would Recorded In The Financial Account On The Credit Side The Amount Of $10 Million Because U.S Receive The Payment Against The Bonds From The Residents Of Maxico so It is Liability For U.S.

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