How Are the Following Transactions Entered into the U

question 32

Essay

How are the following transactions entered into the U.S.balance of payments?
(a) The U.S.government sends $2,000 worth of food aid to Africa.
(b) A U.S.firm exports $10,000 worth of goods to the United Kingdom,payable in 3 months.
(c) A U.S.tourist in Amsterdam spends $200 for food and hotels.

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Definitions:

Transactions Reasons

The underlying motives or justifications for conducting financial transactions or business operations.

Opportunity Costs

The price paid for not selecting the immediate alternative choice during decision-making.

Collection Float

The time period between when a check is deposited into a bank account and when the funds are available for use, affecting the cash flow of a business.

Net Float

The difference between checks written against a checking account and those that have been cleared by the bank.