Consider the following information related to the balance of payments. Make sure you understand that these are the dollar values of each item. You will need to think about whether they show up as a positive or a negative value in the balance of payments. Give all answers to two decimals. The trade balance is Item Exports of goods and services Foreign-owned financial assets in U.S. Foreign-owned real assets in U.S. Imports of goods and services Income payments Income receipts U.S.-owned financial assets abroad U.S.-owned real assets abroad million dollars. (in millions of dollars) 300.00 180.00 267.00 390.00 150.00 225.00 312.00 120.00

Consider the following information related to the balance of payments. Make sure you understand that these are the dollar values of each item. You will need to think about whether they show up as a positive or a negative value in the balance of payments. Give all answers to two decimals. The trade balance is Item Exports of goods and services Foreign-owned financial assets in U.S. Foreign-owned real assets in U.S. Imports of goods and services Income payments Income receipts U.S.-owned financial assets abroad U.S.-owned real assets abroad million dollars. (in millions of dollars) 300.00 180.00 267.00 390.00 150.00 225.00 312.00 120.00

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter18: International Finance

Section: Chapter Questions

Problem 1.1P

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In 2001, the United Kingdoms economy exported goods worth 192 billion and services worth another 77 billion. It imported goods worth 225 billion and services worth Â£66 billion. Receipts of income from abroad were 140 billion while income payments going abroad were 131 billion. Government transfers from the United Kingdom to the rest of the world were 23 billion, while various U.K government agencies received payments of 16 billion from the rest of the world. Calculate the U.K. merchandise trade deficit for 2001. Calculate the current account balance for 2001. Explain how you decided whether payments on foreign investment and government transfers counted on the positive or the negative side of the current account balance for the United Kingdom in 2001.
The GDP for the United States is 18,036 billion and its current account balance is 484 billion. What percent of GDP is the current account balance?
What is included in the current account balance?
Is a country for which imports and exports comprise a large fraction of the GDP more likely to adopt a flexible exchange rate or a fixed (hard peg) exchange rate?
Imagine that the U.S. economy finds itself in the following situation: a government budget deficit of 100 billion, total domestic savings of 1,500 billion, and total domestic physical capital investment of 1,600 billion. According to the national saving and Investment Identity, what will be the current account balance? What will be the current account balance if Investment rises by 50 billion, while the budget deficit and national savings remain the same?
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
Explain where in the U.S. balance of paymentsan entry would be recorded for each of the following:a. A Hong Kong financier buys some U.S. corporate stock.b. A U.S. tourist in Paris buys some perfume to take home.c. A Japanese company sells machinery to a pineapple companyin Hawaii.d. U.S. farmers gave food to starving children in Ethiopia.e. The U.S. Treasury sells a bond to a Saudi Arabian prince.f. A U.S. tourist flies to France on Air France.g. A U.S. company sells insurance to a foreign firm.
Draw and carefully label the Euro-U.S. dollar foreign exchange graph as discussed in the textbook.You must use the Euro/US $ exchange rate as your price variable. Assume we are currently in marketequilibrium. Illustrate using the graph how the equilibrium euro/dollar foreign exchange rate wouldbe affected by the following events, holding all else constant. Use a different graph for each part.Explain in words why the equilibrium exchange rate changed. Show an increase in US productivity relative to the Euro Area
Would each of the following transactions be includedin U.S. net exports or in U.S. net capital outflow?Indicate whether it would represent an increase or adecrease in that variable.a. An American buys a Sony TV.b. An American buys a share of Sony stock.c. The Sony pension fund buys a bond from theU.S. Treasury.d. A worker at a Sony plant in Japan buys someGeorgia peaches from an American farmer.
International Transaction Amount, Billions of $ Services imports -150 Merchandise exports 100 Unilateral transfers (net) -20 Merchandise imports -210 Services exports 200 Income receipts/payments (net) 65 The table above gives hypothetical figures for the U.S. balance of payments. The country’s current-account balance shows a Group of answer choices deficit of $20 billion surplus of $15 billion deficit of $15 billion surplus of $10 billion
Use the following table, which shows the supply and demand schedules for the euro, to answer the next questlon. Quantity of Euros Quantity of Euros Supplied Price Demanded 400 $1.10 100 360 1.00 200 300 0.90 300 286 0.80 400 267 0.70 500 Under a flexible exchange rate system, what wll be the euro rate of exchange for one U.S. dollar? Multiple Choice 0.95 euro 1.00 euros 1.11 euros 1.23 euros