Purchases of government securities in the United States by foreigners is ?
Correct answer: C. a credit item in the capital account
- A. a credit item in the current account
- B. a debit item in the capital account
- C. a credit item in the capital account
- D. a debit item in the current account
Explanation
When foreigners buy U.S. government securities, the United States receives foreign funds and records a capital or financial inflow. In balance-of-payments bookkeeping, an inflow is a credit.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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