Balance of Payments Transaction Classification

Steps:

• Identify initial purchase as UK resident acquiring US real estate, a capital outflow recorded as debit in UK's capital account.
• Classify rent as property income received by UK resident from US tenants, a credit in UK's current account.
• Match to options: debit in capital = import; credit in current = export.
• Confirm B aligns with both classifications.

Why B is correct:

• Purchasing foreign assets is a capital account debit (import per BOP conventions), while rental income is a current account credit (export as income receipt).

Why the others are wrong:

• A: Reverses both—purchase is not current import; rent not capital export.
• C: Misplaces purchase in current account; rent not capital export.
• D: Errs by putting purchase in current export; rent not capital import.

Final answer: B