________ cause foreign exchange to leave the country, and thus they are registered as a ________...
________ cause foreign exchange to leave the country, and thus they are registered as a ________ in the balance of payments.
Select one:
a. Imports; credit
b. Imports; debit
c. Exports; credit
d. Exports; debit
Homework Answers
Option B is correct - Imports; debit
Imports mean buying of foreign goods from the international market by the domestic country. When a country imports goods from other countries, it pays them in their currency and that causes the foreign exchange reserve to decrease in the domestic country.
This is registered as a debit in the balance of payments (all the monetary transactions by international trade). This is a debit because the foreign exchange is leaving the country.
Add Answer to:
________ cause foreign exchange to leave the country, and thus
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