Question

Provide the details of the cash flows involved, including their amounts, time periods, and whether they are inflows or outflows.

Answer 1

The cash flows involved are exports, imports, income payments from abroad, and income payments to foreign investors.

Step-by-step explanation:

The cash flows involved in the given scenario include both inflows and outflows. The details are as follows:

1. Exports of goods and services: This is an inflow of money into the country. The dollar amount of exports is entered in the Export column.
2. Imports of goods and services: This is an outflow of money from the country. The dollar amount of imports is entered in the Import column.
3. Income payments from abroad: This is an inflow of money into the United States. U.S. investors earn this income from investments made abroad. The financial flows of money coming back to the United States are entered in the Export column, under the row for Income payments.
4. Income payments to foreign investors: This is an outflow of money from the United States. Foreign investors earn this money on U.S. assets, like stocks. The financial flows of money going out of the United States to foreign investors are entered in the Import column, under the row for Income payments.

These cash flows occur over different time periods and have different amounts.