An external balance surplus will cause.floating exchange rate regime.in a fixed exchange rate regime andin agovernment intervention to raise the value of the currency; the currency to depreciategovernment intervention to lower the value of the currency; the currency to depreciategovernment intervention to raise the value of the currency; the currency to appreciategovernment intervention to lower the value of the currency: the currency to apprecate

Related Theory:-External Balance Surplus and Exchange Rate RegimesIn a scenario where a country…

Answered: An external balance surplus will cause.…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 3SCQ: State whether each of the following events Involves a financial flow to the Mexican economy or a...

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State whether each of the following events Involves a financial flow to the Mexican economy or a financial flow out of the Mexican economy: Mexico Imports sen4ces from Japan Mexico exports goods to Canada U.S. investors receive a return from past financial investments in Mexico
What happens when a country's economy has a larger participation in foreign trade? It has an underlying trade imbalance. O It has a substantial trade imbalance. O It is more likely to suffer a larger trade imbalance. O It may measure its exports as a share of GDP.
In one yeer the United States had a current eccount delicit of -$358 billion, The balance on the capital account was-$5 billion. What was the balance on the financial account? Multpe Chokce $3 blion $353 bilon -$363 billon -$358 bilon -$363 was incorrect The U.S. often has a significant surplus in services trade, even though it has a deficit in goods trade. True or False True False
Which of the following is not included in the current account?a. exports of goodsb. imports of goodsc. U.S. capital inflow and outflowd. unilateral transfers
18. If more American tourists visit South Africa. The _____________________ of dollars increases and the dollarin the rand/dollar exchange rate _____________________.A Supply; depreciatesB Demand; depreciatesC Supply; appreciatesD Demand; appreciates
tf countries A and B are the only two countries in the world, then if the currency of country A appreciates, the currency of country B Can appreciale relative to other countries Ob May appreciate or depreciate, depending on the volume of trade betweon the two countries OC Must appreciate Od Must depreciate Ce May appreciate or depreciate, depending on the elasticity of demand for the exports of country A
Which of the following with respect to Namibia's Balance of Payments would be true if Toyota decided to move its Production plant in Isipingo South Africa to Walvis Bay Namibia ceteris paribus. i. There would be a net inflow of capital ii. There would be a deficit in the financial account iii. There would be a surplus in the financial account iv. There would be an outflow in the current account O A. i, ii, iii, iv O B. i and iii O Ci and ii O D. i, ii and iii
Suppose the country of Lilliput exported $293 billion worth of goods and imported $473 billion worth of goods in the last calendar year. a. Calculate Lilliput's balance of trade. $ b. Which type of trade balance is Lilliput running? a trade surplus a trade deficit neither a trade deficit nor a trade surplus billion
An increase in the demand for US goods imported into South africa will have the following impact in the South African market: 1. The volume of imports will decrease. True False 2. The balance on the currenbt account of the Balance of Payments will improve. True False
4. Analyzing the effects of a trade deficit You have just been hired by the U.S. government to analyze the following scenario. Suppose the U.S. manufacturing industry is concerned about competition from overseas low-cost producers exporting their goods to the United States, a practice that hurts domestic producers. Lobbyists claim that implementing a tariff on imports would shrink the size of the trade deficit. The following exercise will help you to analyze this claim. The following graph shows the demand and supply of U.S. dollars in a model of the foreign-currency exchange market. Shift the demand curve, the supply curve, or both to show what would happen if the government decided to implement the tariff. Supply Demand -- Supply EXCHANGE RATE (Units of foreign currency per dollar) Demand
The main items on the A. current account are imports and R.O.W. investments in Canada. B. financial account are exports and Canadian investments in R.O.W C. financial account are imports and R.O.W. investments in Canada. D. current account are exports and imports. E. current account are exports and Canadian investments in R.O.W.
In March 2023, imports for the US exceeded their exports by $60.6 billion. In June 2023, the importsexceeded the exports by $74.6 billion. If this trend continues, what impact can this have on the US in the longterm?A. Increased foreign investmentB. Stronger domestic currencyC. Decreased trade protectionismD. Accumulation of foreign debt

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