Answer:
Explanation:
The balance of payments accounts also known as balance of international payments, are the accounts in which a nation records, summarizes all transactions that a country's individuals, companies and government bodies complete with individuals, companies and government bodies outside the country. These transactions consist of imports and exports of goods, services and capital, as well as transfer payments, such as foreign aid and remittances.
A country's balance of payments and its net international investment position together constitute its international accounts.
The balance of payments divides transactions in two accounts: the current account and the capital account. Sometimes the capital account is called the financial account, with a separate, usually very small, capital account listed separately. The current account includes transactions in goods, services, investment income and current transfers. The capital account, broadly defined, includes transactions in financial instruments and central bank reserves. Narrowly defined, it includes only transactions in financial instruments. The current account is included in calculations of national output, while the capital account is not.
Answer:
$165,000
Explanation:
The computation of the reported amount for Allowance for Doubtful Accounts is shown below:
= Young accounts × uncollectible percentage + old accounts balance × uncollectible percentage
= $100,000 × 5% + $400,000 × 40%
= $5,000 + $160,000
= $165,000
We simply added the young accounts and old account balance after considering the uncollected percentage
Answer:
c. make a sterilized purchase of foreign bonds.
Explanation:
A bond can be defined as a debt or fixed investment security, in which a bondholder (investor or creditor) loans an amount of money to the bond issuer (government or corporations) for a specific period of time. The bond issuer are expected to return the principal (face value) at maturity with an agreed upon interest (coupon), which are paid at fixed intervals.
Bonds are generally debts, which may be floated in different ways with respect to the issuer of the bond and its type. Bonds are used by government and corporate institutions to borrow money with interest and they also have to pay for the face value of the bonds at maturity.
The par value of a bond is its face value and it comprises of its total dollar amount as well as its maturity value. Also, the par value of a bond gives the basis on which periodic interest is paid. Thus, a bond is issued at par value when the market rate of interest is the same as the contract rate of interest. This simply means that, a bond would be issued at par (face) value when the bond's stated rated is significantly equal to the effective or market interest rate on the specific date it was issued.
In Economics, bonds could either be issued at discount or premium. A bond that is being issued at a discount has its stated rate lower than the market interest rate, on the specific date of issuance while a bond that is issued at a premium, has its stated rate higher than the market interest rate on the specific date of issuance.
Hence, a central bank can increase its international reserves without changing the domestic money supply by making a sterilized purchase of foreign bonds.
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