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:

Long-Term Liabilities

Long-term liabilities are debts or obligations that are due more than one year in the future, impacting a company's long-term financial sustainability and planning.

Debt-Equity Ratio

The comparative measure of equity and debt in the financing framework for a company's assets.

Dividend Payout Ratio

The percentage of earnings paid to shareholders in dividends, used to measure the extent to which a company returns profits to its shareholders.