Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Question
Chapter 5, Problem 3RQ
To determine
Transactions which make current account and financial account balance equal to zero.
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Students have asked these similar questions
In 2010, the country of Vesey exported goods worth $312 billion and services worth $198 billion. It imported goods worth $525 billion and services worth $255 billion. It sent $1.2 billion in famine relief to Africa, and received $3 billion to support its first democratic election efforts. What was the current account balance in Vesey for 2010?
A nation that currently has a surplus in its capital account is called a
current account surplus nation.
net borrower.
creditor nation.
net lender.
debtor nation.
When the U.S. dollar rises in value relative to the Mexican peso, the dollar has ________, and when the dollar falls in value, it has ________.
depreciated; appreciated
grown; shrunken
been bullish; been bearish
grown; shrunk
appreciated; depreciated
The expected future exchange rate has ________ on the supply of dollars and has ________ on the demand for dollars.
an effect; an effect
no effect; an effect
no effect; no effect
an effect sometimes; an effect sometimes
an effect; no effect
In the long run, the exchange rate between two currencies is
constant.
influenced by purchasing power parity.
determined so that the current account balance equals zero.
undefined.
fixed.
In the foreign exchange market, the supply curve of dollars is
horizontal.
identical to…
Exports
$750
Imports
$600
Net income from abroad -$225
Net unilateral transfers
$30
Based on the data above, what is the current account and financial/capital account balance?
The current account is in deficit, and the financial/capital account is in surplus.
The current account and financial/capital account are both in deficit.
The current account and financial/capital account are both in surplus.
The current account is zero, and the financial/capital account is in surplus.
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- suppose a country has a balance on its current account of negative $10 billion, while the balance on its capital account is a positive $4 billion. What can we conclude?arrow_forwardForeign investment is counted under capital account of balance of payments. True/Falsearrow_forwardBalance on current account? Balance on capital account? Balance on financial account? Does Serbia balance of payments show a deficit, a surplus, or are its international payments accounts in balance?arrow_forward
- if US citizen decides to consume less and save more, then the foreign-exchange price of the dollar will rise True or False.arrow_forwardAssuming that the Euro-U.S. dollar exchange rate is .9. If a German buys an American automobile for $30,000, then what would the automobile cost in Euros? What would the automobile cost if the dollar depreciated by 20 percent?arrow_forwardWhat is included in the current account balance?arrow_forward
- A surplus in a country's financial/capital account necessarily means a recessionary economy a country's exports exceeding its imports flat real interest rates a deficit in its current accountarrow_forwardIf Americans decide to buy more goods from India, and the Indian producers use all of the money to buy American goods, the U.S.: current account deficit and capital account surplus have both decreased. current account deficit and capital account surplus have both increased. current account deficit has decreased and the U.S. capital account surplus has increased. current and capital accounts have not changed.arrow_forwardThe U.S. economy is growing faster than that of Japan. The faster growth rate in the U.S. should cause the value of the dollar to depreciate against the yen, everything else being equal. Explain.arrow_forward
- 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?arrow_forwardFind the invisible balance when the current account balance of payment are 1600 and the trade balance are 1350!arrow_forwardThe Table contains data for the U.S. balance of payments in prior year.All figures are in billions of dollars The data indicate that Americans A. purchased more assets abroad than foreigners bought in the U.S. B. purchased more services abroad than foreigners purchased from the U.S. C. purchased fewer assets abroad than foreginers bought in the U.S. D. have a trade surplus in goods and services Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
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