A company in Panama pays a U.S. architect to design a factory building. By itself this transaction
A)increases Panama's imports and so decreases the Panama's trade balance.
B)increases Panama's exports and so decreases the Panama's trade balance.
C)decreases Panama's imports and so increases the Panama's trade balance.
D)decreases Panama's exports and so increases the Panama's trade balance.

Question

Quizplus · Accepted Answer

When a company in Panama pays a U.S. architect for design services, it is considered an import of services for Panama. This increases Panama's imports, which, in turn, decreases the country's trade balance.

A Company in Panama Pays a U