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22 July, 07:44

The balance of payments (bop) measures all international transactions between two countries. the chart below shows six different transactions between the us and china united states china • purchased $800 of goods and services • sent $100 of humanitarian aid • americans spent $200 in chinese stock market • american tourists spend $1000 in china • chinese tourists spend $1000 in the us • purchased $300 of goods and services • chinese purchased a $600 business in the us • chinese government purchased us. bonds

a. which country has a trade deficit and which has a trade surplus

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  1. 22 July, 08:01
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    Answer: US had a trade deficit and China had a surplus in its BOP

    Explanation:

    Inflow to US economy / Outflow of Chinese economy

    1. Chinese tourist spent $ 1000

    2. Chinese purchased a business $600

    3. Puchased goods $300

    Total Inflow $1900

    US Outflow / China' inflow

    US purchases goods $800

    Sent aid $100

    Investment in stocks $200

    US tourist spent $1000

    Total Outflow $2100

    US had a trade deficit and China had a surplus in its BOP

    Chinese government purchase of US bonds' value is not given, the purchase will be treated as credit to US BOP and the income received will be credit to China's BOP.
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