ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Suppose we are in Balance of Payment equilibrium with a
What happens to the trade deficit if the public sector sells 100 in securities to the foreign sector to finance the budget deficit?
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- China's (Mainland) Balance of Payments. Use the following balance of payments data for China (Mainland) from the IMF Does China's BOP balance in years 2007, 2010, and 2015? China's BOP in year 2007 was (in millions) $_________ (Round to the nearest integer and enter any deficit with a negative sign.) Does China's BOP balance in year 2007? (Select from the drop-down menu.) China's BOP in year 2010 was (in millions) $___________ (Round to the nearest integer and enter any deficit with a negative sign.) Does China's BOP balance in year 2010? (Select from the drop-down menu.) China's BOP in year 2015 was (in millions) $__________ (Round to the nearest integer and enter any deficit with a negative sign.) Does China's BOP balance in year 2015? (Select from the drop-down menu)arrow_forwardCatherin Mann (2006), “The Current Account and the Budget Deficit: A Disaggregated Perspective,” in Kopcke, Tootell, and Triest (eds.), The Macroeconomics of Fiscal Policy, MIT Press In the article, Mann notes that the foreign financing of the US current account deficit has increasingly taken the form of foreigners purchasing US Treasury bonds. She is concerned that the increase of foreign holdings of US Treasury bonds may worsen the US current account deficit in the future. Which of the following statements is inconsistent with her reasons behind the concern? a. As global interest rates starts to climb, the overall payments on interest-bearing liabilities (including US Treasury bonds) will rise. b. The interest paid on US government debt (ie, US Treasury bonds) will be increasingly paid to foreign holders, setting up a negative feedback loop between fiscal deficit and current account deficit. c. The greater the US current account deficit, the larger the risk of eventual, sharp…arrow_forwardSuppose 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 billionarrow_forward
- In an economy open to trade, must a government budget deficit always be accompanied by an external sector deficit? Why or why not? Could a government budget deficit lead to a government budget surplus?arrow_forwardSupposed that a small open economy is running a trade deficit. The government enacts protectionist trade policies (such as a tariff or quota on imports) with a goal of reducing the trade deficit. Show the impact on the trade deficit? what is the impact on the volume of trade? explain whether the government was succesful in reaching its goal.arrow_forwardA country has 4,000 in domestic savings and firms spent 4,140 on new plant and equipment. The national budget surplus is 60. What must the country’s trade balance be?arrow_forward
- What difference does it make whether a Japanese or a US citizen buys the US bonds issued to finance a government budget deficit?arrow_forwardPlease define trade surplus, deficit and balance concepts. What currency strategy would you suggest to resolve a trade deficit problem? Please explain your answer with a numerical example.arrow_forwardWhat is ? 1-)Balance Of Payments 2-)Trade Deficit 3-)J-Curve Effectarrow_forward
- Answer in all option pleasearrow_forwardIf there is no trade deficit, budget deficit =$500, what is the difference between savings and planned investment in equilibrium?arrow_forwardWhat is a trade deficit? How is a trade deficit related to the net inflow of foreign capital? Is a trade deficit bad? Why or why not?arrow_forward
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