International Transaction

The export of merchandise goods such as trucks, machinery, computers, telecommunications equipment, and so forth is obviously an international transaction. Imports such as French wine, Japanese cameras, and German automobiles are also clearly international transactions. But this merchandise trade is only a portion of the thousands of different international transactions that occur in the United States or any other country each year.

Many other international transactions are not so obvious. The purchase of a glass figure in Venice, Italy, by a U.S. tourist is classified as a U.S. merchandise import. In fact, all expenditures made by U.S. tourists around the globe for service (meals, hotel accommodations), but not for goods, are recorded in the U.S. balance of payments as imports of travel services in the Current Account. The purchase of a U.S. Treasury bill by a foreign resident is an international financial transaction and is duly recorded in the Capital/Financial Account of the U.S. balance of payments.

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