Question

Service transactions are the largest component of the US current account. True or False? Assume Anaconda...

Service transactions are the largest component of the US current account.

True or False?

Assume Anaconda Copper Inc. created a subsidiary in Chile last year to mine copper ore. The proportion of net income paid back to the parent company as a dividend would be recorded in the current account subcategory of

A) services

B) net income from investment

C) merchandise

D) none of the above

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Homework Answers

Answer #1

Answer-

The statement is False.

Service transaction is a transaction which is performed for the customer in exchange for payment as opposed to a retail transaction where goods are exchanged for payment.

For the United States, the largest component of its current account transactions consists of ​payments for imports of goods and services and receipts from exports of goods and services.

Answer-

The correct Option is B. net income from investment.

The proportion of net income paid back to the parent company as a dividend would be recorded in the current account subcategory of net income from investment.

The other Options are incorrect.

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