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Residents of the United States who tour abroad purchase foreign currency with which to meet their expenses. If US. residents transfer balances of $5 million in US. banks to foreigners in exchange for foreign currency that they spend traveling abroad, the end result is that the account "Travel" must be debited $5 million to reflect US. purchases of this "asset," and "Foreign private short-term claims" must be credited $5 million to show the increase in U.S. demand deposit liabilities. Such expenditures on travel are classified under the general heading of "Imports of goods and services," since the expenditures go to purchase goods and services from foreigners.
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