Personal consumption expenditures

The double-entry principle in the balance-of-payments

Sliva [168]

Answer:

The Current account is for goods and services.

The Financial account is for exchange of currencies and financial assets across countries.

Miguel, a U.S. resident, buys an HDTV set for $2,500 and sends it to Mexico as a gift to his parents. <u>DEBIT CURRENT ACCOUNT. CREDIT CURRENT ACCOUNT. </u>

Miguel buys the good in the U.S. and then sends it so this falls under the current account alone.

Arielle, a French tourist, stays at a hotel in San Francisco and pays $400 for it with her debit card issued by a French bank. <u>DEBIT FINANCIAL ACCOUNT. CREDIT CURRENT ACCOUNT. </u>

The Financial account should be debited to show that currency is coming into the U.S. from outside the country and current account should be credited for services rendered.

A U.S. computer manufacturer purchases hard drives from a Korean company, paying the funds from its bank account in Korea. <u>DEBIT CURRENT ACCOUNT. CREDIT FINANCIAL ACCOUNT. </u>

Current account should be debited to reflect that goods are coming into the country but the financial account should be credited to show that currency is leaving the ownership of an American entity so it is passing out of American hands.

3 0

3 years ago

Laurel, Inc., and Hardy Corp. both have 6 percent coupon bonds outstanding, with semiannual interest payments, and both are curr

stealth61 [152]

Answer:

A. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds?

Laurel, Inc. = -8.11%

Hardy Corp. = -18.91%

B. If interest rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of these bonds be then?

Laurel, Inc. = +8.98%

Hardy Corp. = +25.49%

Explanation:

bonds with 6% semiannual coupons, sold at par $1,000

Laurel, Inc. bond maturity in 5 years

Hardy Corp. bond maturity in 18 years

the current price of a bond is the sum of the present value of its face value and coupons. I will use an annuity table to calculate PV of face value and an ordinary annuity table for the coupons:

Laurel, Inc.

market rate 4% = ($1,000 x 0.8203) + ($30 x 8.9826) = $820.30 + $269.48 = $1,089.78, % change = 89.78/1,000 = 8.98%

market rate 8% = ($1,000 x 0.6756) + ($30 x 8.1109) = $675.60 + $243.33 = $918.93, % change = -81.07/1,000 = -8.11%

Hardy Corp.

market rate 4% = ($1,000 x 0.4902) + ($30 x 25.489) = $490.20 + $764.67 = $1,254.87, % change = 254.87/1,000 = 25.49%

market rate 8% = ($1,000 x 0.2437) + ($30 x 18.908) = $243.70 + $567.24 = $810.94, % change = -189.06/1,000 = -18.91%

3 0

4 years ago

On March 1, 2020, the Teal Company received a $45,000 payment for annual magazine subscriptions (the subscriptions run from the

bulgar [2K]

Answer:

The company has incorrectly credited the sales revenue account at the time of the receipt of payment. So, the journal entry to record the transaction is as follows:

Date Particulars Debit Credit

March 1, 20 Sales Revenue A/c $45,000

To Unearned Sales Revenue A/c $45,000

(To record Unearned sales revenue)

5 0

3 years ago

True or False: The Law of One Price states that in competitive markets free of transportation costs and barriers to trade (such

sukhopar [10]

Answer:

It is False

The law of one price (LOOP) states that in the absence of trade frictions (such as transport costs and tariffs), and under conditions of free competition and price flexibility (where no individual sellers or buyers have power to manipulate prices and prices can freely adjust), identical goods sold in different.

4 0

3 years ago

Read 2 more answers

While a(n) Blank______ firm views the world as one market and emphasizes cultural similarities across countries rather than diff

givi [52]

A firm that treats the whole world as one market by emphasizing the similar cultures in all the countries is called a global marketing firm.
A firm that observes the world is comprised of different countries and done marketing of products in each country in a varied manner is called a multinational marketing firm.

<h3>What is a marketing firm?</h3>

A marketing firm is an entity that enabled a business to create, execute and sustain the marketing strategies in the consumer market.

The global marketing firm is the one that creates a standardized market in the scenario of similar cultures and adapts when the cultures are different in the worldwide market.

The multi-national marketing firm is the entity that introduces varied products, their branding, and promotion in various countries in which they have their businesses.

Therefore, the global marketing firm focuses on marketing in the entire world whereas the multinational marketing firm focuses on the country in which they have their business set up.

Learn more about the marketing in the related link:

brainly.com/question/27155256

#SPJ1

5 0

2 years ago