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Questions and Answers
What happens when a company in Panama pays for a U.S. architect to design a factory building?
What happens when a company in Panama pays for a U.S. architect to design a factory building?
- It is a portfolio investment.
- It is a foreign direct investment.
- It is an export of a service.
- It is an import of a service. (correct)
Which of the following best describes the architect's role in this transaction?
Which of the following best describes the architect's role in this transaction?
- Exporter of a service. (correct)
- Foreign investor.
- Importer of a service.
- Exporter of goods.
What type of account would this transaction be recorded in?
What type of account would this transaction be recorded in?
- Capital account.
- Current account. (correct)
- Financial account.
- Trade account.
What effect does this transaction have on the U.S. balance of payments?
What effect does this transaction have on the U.S. balance of payments?
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What type of economic activity is represented by this transaction?
What type of economic activity is represented by this transaction?
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Study Notes
A company in Panama pays for a U.S. achitect to design a factory building. By itself this transaction
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