The balance of payment current account visible balance section carried imports of goods of $10,000.00 and exports of good of $9,500.00. What is the balance of trade? Oa+$19,500.00 O b.-$500.00 OC. $19,500.00 O d. + $500.00
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- . If a US resident spends $1,000 to buy €880 worth of French burgundy wine, the US balance of payments shows… a) current acct imports of -$1,000 and capital acct exports of +€880 b) current acct imports of -€880 and capital acct exports of -$1,000 c) current acct imports of -$1,000 and capital acct exports of +$1,000 d) capital acct exports of +$1,000 and capital acct imports of -$1,000.Consider the balance-of-payments accounting information for Lalaland in 2010 as shown in the table below. All values are in billions of dollars and any variables not provided below have a value of zero. Exports 560 Imports Net foreign-investment income Capital outflows Capital inflows 350 - 50 255 95 What is the current account balance for Lalaland in 2010? ..... O A. $160 billion O B. $260 billion OC. - $260 billion O D. - $160 billion O E. $03 / 3 100% 每 8. The price of a laptop in the United States is $1,000. The price of a car in taly is 10,000 euros The current exchange rate rs09 curos per dollr. Ifa laptop is exported from the United Startes to Italy with no barriers to trade, what will be the price of the aptop in Italy? Ira car is imported to the United States from luh with barriers to trade, what will be the price of the crin ahe Ented Statres? Suppose the dollar appreciates by 0pereent aganscihecomo. Whr will be the price ofa computer exporied from the United States changem ltaly? -Suppose thhe dollarapprecites br 10 percentagamst the curoWt willbethe price of a car inmported to the Enred States from Ital chnge m tdhe Eaed Statese (8 marks) (2marks) 2marks) (2marks] (2marks)
- 26. Foreign Exchange Market 1 A E[Euro return] Rates of Return (in dollar terms) An increase in the money supply would shift the Rs1 curve to the and the dollar would O A. Left: depreciate O B. Right: depreciate O C. Right: appreciate O D. Left: appreciate 3. Given the following data: Et = ¥125 = $1.00 Et+1 = ¥105 = $1.00 Rus = 10% Rjapan = 12% If a $1,000 is invested in the US, the future value is repatriated back to dollars, the future value is $ If the the $1.000 is invested in Japan and _respectively. O A. $1,000: $1,100 O B. $1,100: $1,000 O C. $1,100: $1,120 O D. $1,100: $1,333 21. Which of the following replicates a characteristic of horizontal FDI. O A. Behind the large increases in FDI inflows to develping countries O B. Mainly driven by the production cost differencs between countries C. Production cost differences in FDI to developing countries O D. The affiliate replicates the production process elsewhere in the world 30. STRAWBERRIES CHAMPAGNE aLc = 4 hours per pound a'Lc…Under a fixed exchange rate system (A). would be an exogenous monetary policy instrument, whereas under a flexible exchange rate system (B) endogenous monetary policy instrument. would be an O a. (A) the interest rate; (B) the exchange rate O b. (A) the exchange rate; (B) the interest rate O c. (A) the interest rate; (B) the interest rate O d. (A) the exchange rate; (B) the exchange rateDetermine which account of the Balance-of-Payments is affected the following transaction: National Commercial Bank, a local company, pays USS1 million in dividends to foreign shareholders. Select one: O a. Current Account - Exports O b. Current Account - Imports O c. Capital Account - Portfolio Investment O d. Capital Account - Foreign Direct Investment O e. Current Account - Transfers
- Consider the balance-of-payments accounting information for Lalaland in 2010 as shown in the table below. All values are in billions of dollars and any variables not provided below have a value of zero. Exports Imports Net foreign-investment income Capital outflows Capital inflows 500 510 - 40 180 90 What is the net change in the stock of Lalaland's investments abroad in 2010? ..... O A. an increase of $30 billion O B. a decrease of $30 billion OC. a decrease of $50 billion O D. an increase of $50 billion O E. insufficient information to determineDetermine which account of the Balance-of-Payments is affected by the following transaction: You travel to the United States for holiday and spend US$500 Select one: O a. Current Account - Imports O b. Capital Account - Portfolio Investment O c Current Account - Exports O d. Capital Account Foreign Direct Investment O e. Current Account- Transfersdetermine the purchasing power of the country China for aconsumer good that they would buy from their Canadian trading partner. Also, calculate whatCanada’s purchasing power is with a country that they import from. See example below on Coca Colaand Mexico. Purchasing Power Example In the example of the picture, if a Canadian company operating in Mexico were to pay its Mexican employeesthe equivalent of $10/hour CAD (or 100 pesos/hour according to our fictional exchange rate), theMexican employee would actually enjoy greater purchasing power (the ability to acquire 20 colasversus only 10 colas) than his/her Canadian counterparts.
- Determine which account of the Balance-of-Payments is affected the following transaction: National Commercial Bank, a local company, pays US$1 million in dividends to foreign shareholders. Select one: a. Current Account Transfers O b. Current Account Imports O c. Capital Account Portfolio Investment d. Capital Account Foreign Direct Investment O e. Current Account - ExportsB C D E F G H J K L M e US dollar to Euro exchage rate is 0.886, The US dollar to Austailian dollar exchange rate is 0.5352 and canadian dollar to US dollar exchange rate is 1.5815 lculate: The Euro to US dollar, the Australian dollar to US dollar and the US dollar to canadian dollar exchange rates. xchange rates beginning ending minimum median 0.886 maximun mean dollar to foreign currencyPurchasing-power parity holds between the nationsof Ectenia and Wiknam, where the only commodityis Spam.a. In 2020, a can of Spam costs 4 dollars in Ecteniaand 24 pesos in Wiknam. What is the exchange ratebetween Ectenian dollars and Wiknamian pesos?b. Over the next 20 years, inflation is expected to be3.5 percent per year in Ectenia and 7 percent peryear in Wiknam. If this inflation comes to pass,what will the price of Spam and the exchangerate be in 2040? (Hint: Recall the rule of 70 fromChapter 27.)c. Which of these two nations will likely have ahigher nominal interest rate? Why?d. A friend of yours suggests a get-rich-quickscheme: Borrow from the nation with the lowernominal interest rate, invest in the nation with thehigher nominal interest rate, and profit from theinterest-rate differential. Do you see any potentialproblems with this idea? Explain.