Which of the Following International Transactions Would NOT Be Counted

question 5

Multiple Choice

Which of the following international transactions would NOT be counted as a balance of payments (BOP) transaction?

• A) An American tourist purchases cheese in Milwaukee, Wisconsin.
• B) The U.S. subsidiary of a British firm pays profits (dividends) back to its parent firm in London.
• C) A Canadian lumber baron purchases a U.S. corporate bond through an investment broker in Seattle.
• D) All of the above are considered BOP transactions.

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Definitions:

Retires

The act of leaving one’s job or career and ceasing to work, typically due to reaching a certain age.

Liable

Being legally responsible or accountable, usually in the context of paying damages or fulfilling obligations.

Transferable Interest

The aspect of an owner's interest in a business that can be transferred or sold to another party.

Creditor

An entity or person to whom money is owed by a debtor or borrower.