if-a-us-citizen-buys-a-car-from-germany-for-40000-how-does-this-transaction-affe

Question

If a US citizen buys a car from Germany for $40,000, how does this transaction affect the balance of payments?

Accepted Answer

It increases the current account deficit by $40,000 and increases the financial account surplus by $40,000.

Answer

It increases the current account deficit by $40,000 and decreases the financial account surplus by $40,000.

Answer

It has no effect on the balance of payments.

Answer

It decreases the current account surplus by $40,000 and decreases the financial account deficit by $40,000.

If a US citizen buys a car from Germany for \$40,000, how does this transaction affect the balance of payments?