If a French Company Sells 1000 Gallons of Perrier to a Canadian

question 87

Multiple Choice

If a French company sells 1000 gallons of Perrier to a Canadian company at 25 francs per gallon and uses the money to buy stock in a Spanish cork company,how does this affect the French balance of payments accounts?

• A)debit: capital account;credit: merchandise trade
• B)debit: merchandise trade;credit: capital account
• C)debit: net investment income from abroad;credit: capital account
• D)debit: merchandise trade;credit: net investment income from abroad

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