When a U.S. importer buys 100,000 pairs of pants from a Hong Kong company, this transaction will represent a(n)

A) inflow of money on the current account of the U.S. balance of payments.
B) outflow of money on the current account of the U.S. balance of payments.
C) credit on the financial account of the U.S. balance of payments.
D) debit on the financial account of the U.S. balance of payments.

Question

Gabby Revell · Accepted Answer

Final Answer : B, Explanation :  When a U.S. importer buys goods from abroad, in this case, 100,000 pairs of pants from a Hong Kong company, it represents an import transaction. This leads to an outflow of money from the U.S. as payment for the imported goods, which is recorded on the current account of the U.S. balance of payments.

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