Practice Questions1. What is meant by the balance of payments?2. What economic transactions give rise to the receipt of Guyanese dollars from foreigners? Whattransactions give rise to payments to foreigners?3. Why does the balance of payments statement balance?4. From a functional viewpoint, a nation's balance of payments can be grouped into severalcategories. What are these categories?5. What financial assets are characterized as official reserve assets for Guyana?6. What are the meanings of a surplus (deficit) on the merchandise trade balance, goods andservices balance, and current account balance?7. Why has the goods and services balance sometimes shown a surplus while the merchandisetrade balance shows a deficit?8. What does the balance of international indebtedness measure? How does this statement differfrom the balance of payments?9. Indicate whether each of the following items represents a debit or credit on the U.S. balance ofpayments:a. A U.S. importer purchases a shipload of French Wineb. A Japanese automobile firm builds an assembly plant in Kentuckyc. A British manufacturer exports machinery to Taiwan on a U.S. vesseld. A U.S. college student spends a year studying in Switzerlande. U.S. charities donate food to people in Africaf. Japanese investors collect interest income on their holdings of U.S. government securitiesg. A German resident sends money to her relatives in the U.S.h. Lloyds of London sells an insurance policy to a U.S. business firmi. A Swiss resident receives dividends on her IBM stock10. Given the hypothetical items shown in the Table, determine the international position of theU.S. Is the U.S. a net creditor nation or a net debtor nation?Foreign official assets in the U.S.Other foreign assets in the U.S.U.S. government assets abroadU.S. private assets abroadInternational Investment Position of theUnited States (Billions of Dollars)2522515075

The balance of payments is an efficient record of all economic transactions between a country and…

Practice Questions 1. What is meant by the balance of payments? 2. What economic transactions give rise to the receipt of Guyanese dollars from foreigners? What transactions give rise to payments to foreigners? 3. Why does the balance of payments statement balance?

Practice Questions 1. What is meant by the balance of payments? 2. What economic transactions give rise to the receipt of Guyanese dollars from foreigners? What transactions give rise to payments to foreigners? 3. Why does the balance of payments statement balance?

ENGR.ECONOMIC ANALYSIS

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