If a US Firm Borrows from an American Bank and Then Converts

question 114

Multiple Choice

If a U.S. firm borrows from an American bank and then converts that money to euros to buy French wine, it will be accounted for as a(n) :

• A) subtraction from the U.S. capital account.
• B) addition to the U.S. current account.
• C) subtraction from the U.S. current account.
• D) addition to the U.S. capital account.

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