Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter 15, Problem 12SQ
To determine
Account that includes the tourism expenditures and foreign gifts and investment income.
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If there is a decrease in the desire of Americans to purchase goods and services from other countries and put money in foreign banks and businesses then how would this affect the U.S. foreign exchange market?
A. The equilibrium quantity of foreign currency would increase and the US dollar would appreciate.
B. The equilibrium quantity of foreign currency would decrease and the US dollar would appreciate.
C. The equilibrium quantity of foreign currency would increase and the US dollar would depreciate.
Expenditures for services such as tourism,income for foreign investment, and foreign giftsare tabulated in thea. current account.b. capital account.c. official reserve account.d. goods account.
when a domestic investor buys a foreign asset, the financial account would rise, stay the same or fall?
Chapter 15 Solutions
Micro Economics For Today
Ch. 15.4 - Prob. 1GECh. 15.6 - Prob. 1GECh. 15 - Prob. 1SQPCh. 15 - Prob. 2SQPCh. 15 - Prob. 3SQPCh. 15 - Prob. 4SQPCh. 15 - Prob. 5SQPCh. 15 - Prob. 6SQPCh. 15 - Prob. 7SQPCh. 15 - Prob. 8SQP
Ch. 15 - Prob. 9SQPCh. 15 - Prob. 10SQPCh. 15 - Prob. 11SQPCh. 15 - Prob. 1SQCh. 15 - Prob. 2SQCh. 15 - Prob. 3SQCh. 15 - Prob. 4SQCh. 15 - Prob. 5SQCh. 15 - Prob. 6SQCh. 15 - Prob. 7SQCh. 15 - Prob. 8SQCh. 15 - Prob. 9SQCh. 15 - Prob. 10SQCh. 15 - Prob. 11SQCh. 15 - Prob. 12SQCh. 15 - Prob. 13SQCh. 15 - Prob. 14SQCh. 15 - Prob. 15SQCh. 15 - Prob. 16SQCh. 15 - Prob. 17SQCh. 15 - Prob. 18SQCh. 15 - Prob. 19SQCh. 15 - Prob. 20SQ
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- Thailand is a net-importer. This means that they import more than they export. How does this affect the value of their currency with respect to foreign exchange? a. None of these b. their currency will become weak c. their currency will not be affected d. their currency will become strongarrow_forwardAll of the following are surplus items on a country's balance of payments EXCEPT a. gold sales to foreigners. b. exports. c. foreign tourists expenditures in the host country. d. purchase of foreign assets.arrow_forwardIf there is a decrease in the desire of foreigners to purchase goods and services from the United States and a lower desire to invest in U.S. banks and businesses, then how would this affect the U.S. foreign exchange market? A. The equilibrium quantity of foreign currency would decrease and the U.S. dollar would depreciate. B. The equilibrium quantity of foreign currency would decrease and the U.S. dollar would appreciate. C. The equilibrium quantity of foreign currency would increase and the U.S. dollar would depreciate. D. The equilibrium quantity of foreign currency would increase and the U.S. dollar would appreciate.arrow_forward
- As domestic currency appreciates, we would expect a. Trade deficit to decrease. b. Trade deficit to increase. c. Imports to decrease. d. Exports to increase.arrow_forward1. A. Calculate the current account for U.S. based on the following data for 2018. Export of goods and services $270, Import of goods and services $230, Foreign aids and grants received $120, Foreign aids and grants provided $63, Investment by U.S. companies in foreign countries for establishing subsidiaries $550, Interest and dividend received by U.S $90, investment by foreigners in US companies' bonds and stocks $50. All numbers are in billions of dollars. b. Is U.S. running a deficit or surplus on current account balance, explain in 1 - 2 meaningful sentencesarrow_forwardWhat is the relationship between the current account and the capital account in the balance of payments? Select one: a. The current account shows all income and expenditure and the capital account shows investment and how it is funded. b. The capital account shows how a current account deficit is funded or a surplus is disbursed. c. There is no relationship between them as they measure different things. d. The current account balance is the difference between exports and imports and the capital account balance shows net foreign income.arrow_forward
- Describe the foreign exchange market and its components.arrow_forwardThe record of a country's transactions in goods, services, and assets with the rest of the world is its A) balance of trade account. B) current account. C) capital account. D) balance of payments accountarrow_forwardThe 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.arrow_forward
- A negative value for the line item "Changes in official international reserves" in the balance of payments statement indicates that A. the Bank of Canada issued foreign exchange. B. the Bank of Canada used foreign exchange to buy Canadian dollars on the foreign exchange markets. C. the Bank of Canada increased its reserves of foreign exchange. D. the Bank of Canada sold off some of the gold that it uses to back the Canadian dollar.arrow_forwardSelect all that are true given an increase in foreign investment from the domestic economy: A. Domestic economic growth (GDP) increases, ceteris paribus B. Investment from the domestic economy to the foreign economy decreases C. The domestic currency depreciatesarrow_forwardUnder a system of flexible exchange rates, what will correct a deficit in a country's balance of payments? a. an appreciation in the nation's currency b. a decline in the nation’s domestic price level c. a depreciation in the nation's currency d. an increase in the nation’s inflation rate 2. Which of the following would supply Canadian dollars to the foreign exchange market? a. an increase in the number of Canadians going to Las Vegas over the holidays b. an increase in spending due to American tourists in Canada c. the sale of a Canadian corporation to a German investor d. the sale of wheat from Manitoba to a European bakeryarrow_forward
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