Which One of the Following Transactions Would Appear as a Debit

question 50

Multiple Choice

Which one of the following transactions would appear as a debit in the current account of the Canadian balance of payments?

• A)The Arabian Capital Investment Corporation makes a loan to a Canadian firm.
• B)A Canadian subsidiary exports raw materials to its Dutch parent company.
• C)Canadians receive dividends on U.S.investment in Latin America.
• D)Canadian tourists in France purchase cases of wine.
• E)The Bank of Canada purchases euros to hold in its official reserves.

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Definitions:

Potential Competitors

Firms that are not currently in a market but have the capacity to enter if they choose.

Price-Elastic

Price-elastic refers to the responsiveness of the quantity demanded or supplied of a good to a change in its price; high elasticity means quantity changes significantly with price changes.

Amtrak Train Service

A government-owned corporation that provides intercity passenger train service in the United States.

Other Passengers

Individuals sharing a transport service such as a bus, plane, or carpool, not including the service provider or driver.