The balance of payments

Mr. Frank is a citizen of Gatorland. He wants a better return on his savings than he gets in Gatorland, so he buys newly issued government bonds from the nation of Hamsterville.

How is this purchase counted in the balance of payments in each country?

(Choice A)
A debit in Gatorland’s current account; a credit in Hamsterville's current account.
(Choice B)
A credit in Gatorland ’s financial account; a debit in Hamsterville's financial account.
(Choice C)
A debit in Gatorland’s financial account; a credit in Hamsterville's financial account.
(Choice D)
No impact on Gatorland’s balance of payments; a credit in Hamsterville's current account.

Macroeconomics

Course: Macroeconomics > Unit 6

Problem