Sure, let's break it down step by step:
A. A Mexican bank's purchase of Microsoft stock (Microsoft is an American-owned firm)
- This would be recorded as a debit in the U.S. current account because it represents an outflow of financial assets from the U.S. to Mexico.
B. A German citizen's receipt of a $50 dividend check on shares of stock she owns in a U.S. corporation
- This would be recorded as a credit in the U.S. current account because it represents an inflow of earnings (dividend) from the U.S. to Germany.
C. An American consumer's purchase of a Mexican-made VCR
- This would be recorded as a debit in the U.S. current account because it represents an outflow of goods (import) from Mexico to the U.S.
D. An American tourist's payment to a Mexican hotel
- This would be recorded as a debit in the U.S. current account because it represents an outflow of services (payment for accommodation) from the U.S. to Mexico.
E. A Mexican consumer's purchase of a computer produced in the United States by a U.S. firm
- This would be recorded as a credit in the U.S. current account because it represents an inflow of goods (export) from the U.S. to Mexico.
In summary:
- Debits (A, C, D) represent outflows or payments from the U.S.
- Credits (B, E) represent inflows or receipts into the U.S.