Question

Determine if each statement describes the current account, the capital account, or neither.

Determine if each statement describes the current account, the capital account, or neither The current account The capital account Neither The United States gives S50 billion to Icelandic villages that were destroyed by a volcano. Ashley lives in New York. However, she works every other month in Berlin for the German airline, Lufthansa. Answer Bank This account tracks money flowing into and out of foreign financial and physical assets This account includes items like imports, exports, income, and money transfers Jessica, who lives in Pennsylvania, purchases her first new car, a Ford Fusion. Hajime, who lives in Tokyo, buys 500 shares of Starbucks stock after the company develops a new home coffee machine Caterpillar, a company based in Peoria, IL, retrofits its Columbus, OH, manufacturing facilities for $90 million.

Answer 1

Answer:

"This account tracks money..." : Capital account (because it records the flow of capital from one country to another)

"This account includes imports, exports..." Current account (because it records the flow o goods and services, transfer payments from one country to another).

"Jessica, who lives in..." : Neither (because she is the resident of US and purchases the US firm produced good)

"Hajime, who lives in...." : Capital account (Because it records the flow of capital, share capital, across the countries).

"Caterpillar...": Neither (because it is a US company conducting its operation in different states of USA)