Author Question: A U.S. citizen buys a newly issued share of stock in England, paying for his order with a check, ... (Read 54 times)

tiara099 · **on:** Jun 30, 2018

A U.S. citizen buys a newly issued share of stock in England, paying for his order with a check, which the British company deposits in its own U.S. bank account in New York. How is this transaction accounted for in the balance of payments?

A) financial account, U.S. asset export
B) current account, U.S. service import
C) current account, British good export
D) financial account, British asset import
E) financial account, U.S. asset import

Question 2

A permanent increase in a country's money supply

A) causes a more than proportional increase in its price level.
B) causes a less than proportional increase in its price level.
C) causes a proportional increase in its price level.
D) leaves its price level constant in long-run equilibrium.
E) causes an inversely proportional fall in its price level.