When There Is a Negative Entry for Unilateral Transfers in the Balance

question 144

Multiple Choice

When there is a negative entry for unilateral transfers in the balance of payments, it means that

• A)there must be an offsetting positive sign in the capital account.
• B)U.S. residents gave more to foreign residents than foreign residents gave to U.S. residents.
• C)U.S. residents purchased less services from foreign countries than foreign countries purchased from U.S. residents.
• D)U.S. residents purchased more services from foreign countries than foreign countries purchased from U.S. residents.

---

Definitions:

Installment Payments

Payments made regularly over a period of time to settle a debt or purchase price.

Redemption

Redemption is the process of repurchasing or retiring a financial instrument, such as bonds or preferred stock, by the issuer before its maturity date.

Premium on Bonds Payable

The amount by which a bond's selling price exceeds its face value, reflecting higher interest earnings for the investor than the market rate.

Conversion

The process of changing assets from one form to another, such as the conversion of raw materials into finished goods.