How will the following transactions be reflected in the U.S. balance of payments?
a. A U.S. MNC sells $5 million in automotive parts to a firm in Italy, receiving a check drawn on the Italian company's U.S. bank account.
b. A Japanese corporation purchases a plant in the United States for $200 million, using the proceeds of a loan from a U.S. bank.
Balance of payment may be defined as systematic record of all economic transactions between a resident of the country and the rest of the world during the given period. The three main components of the Balance of Payments are:
1. The Current Account ...
This discusses the impact of various transactions on U.S. balance of payments in 177 words with a short introduction on the components of the Balance of Payments.