Which of the following would cause a strengthening of the U.S. balance of payments?

An increase in imports of goods and services
An increase in transfer payments by Americans to their families abroad
An increase in investment by Americans in foreign companies
An increase in the Bank of England’s holding of U.S. dollars as foreign exchange reserves

Question

Which of the following would cause a strengthening of the U.S. balance of payments?

An increase in imports of goods and services
	An increase in transfer payments by Americans to their families abroad
	An increase in investment by Americans in foreign companies
	An increase in the Bank of England’s holding of U.S. dollars as foreign exchange reserves

anonymous · Answer

hello?

anonymous · Answer

I would say the answer is the last one because it's the only one where USD is demanded by another party. If we import, transfer or invest then we have to pay which will cause a deficit in the balance of payments.