Question

A Japanese insurance company purchases U.S. government securities. From the perspective of the United States, the balance of trade with Japan will _____ and the balance of payments with Japan will _____.
a. not change; improve
b. not change; get worse
c. improve; improve
d. improve; get worse

Answer 1

Answer:

a. not change; improve

Explanation:

Balance of trade is the difference in value over a period of time between a country’s imports and exports of goods and services,  usually expressed in the unit of currency of a particular country (e.g., dollars for the United States, yen for the Japan).

Balance of payments record the receipts and payments of the residents of the country in their transactions with residents of other countries.

A Japanese insurance company purchases U.S. government securities. From the perspective of the United States, the balance of trade with Japan will not change and the balance of payments with Japan will improve.