A Chinese investor is buying $1,000,000 of United States government bonds. This amount is recorded in which of the following accounts in China’s balance of payment? a. Portfolio Investment b. Other Investment c. Official Reserve Balance d. Direct Investment
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A Chinese investor is buying $1,000,000 of United States government bonds. This amount is recorded in which of the following accounts in China’s balance of payment?
| a. |
Portfolio Investment |
|
| b. |
Other Investment |
|
| c. |
Official Reserve Balance |
|
| d. |
Direct Investment |
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- You are given the following information. Savings S = 150 Investment I = 100 Taxes T = 250 Government Purchases G = 500 Compute the level of private savings, public savings, national savings, and net exports.Low interest rates means low inflation which means depreciated currency. This stimulates businessmen to invest abroad as interest rates are low. How can they invest abroad if the currency is depreciated? Wouldn't that be illogical and unfeasible? (According to Mankiw's textbook)Lower Interest rates encourage additional investment spending, which gives the economy a boost in times of slow economic growth. (Investopedia) Is this talking about investment spending abroad or investment spending in general? If Investment abroad increases how can that boost the economy? Aren't those statements contradictory?Recently, Turkey has experienced high inflation and high interest rates. IN spite of that its currency depreciated at historical levels. Is this because of other reasons than high inflation and high interest rates? Do we normally assume "ceteris paribus" when talking about this correlation? Even though its currency depreciated, there were investments made in Turkey. Why?The rest of the world claims 100 of debt from the country above. This is a stock variable. The country lends at 4% and borrows at 3%. These are rates of change of stocks. Use this information combined with one of the flow variables describing the country’s international transactions to find the stock of what the world owes this country. Note: no workers worked across the border. No wages flowed in, none flowed out. 125 Is the country from the previous question rich or poor? Does it enjoy the exorbitant privilege? In what important way is this country’s stock and flow of investment are different from the US?
- What is the relationship between Gold prices and Dollar Index?The Central Bank of Iran increased its interest rates. How will an increase in interest rates affect the level of investments in Iran? a. it will not be affected b. it will fall c. it will increase by the same amount of interest rate d. it will increasePQ 26 How, using the IS/LM/Bp model, can as increase in foreign interest rates lead to an increase in domestic interest rates?
- There are two countries in the world, Australia and Japan. Suppose that the central bank of Australia and the central bank of Japan raise the real interest rate by 1 percent. In this case, the nominal exchange rate (Yen/Dollar) increases. .True/False. Remember to include your explanation.In the short run, open-market purchases A) increase investment and real GDP, and decrease interest rates. B) increase real GDP and interest rates, and decrease investment. C) increase investment and interest rates, and decrease real GDP. D) decrease investment, interest rates, and real GDP.When a country's currency appreciates, the prices of its exports in terms of foreign currency will ______. remain constant decrease increase fluctuate randomly.
- International Finance (chapter 21) Question Explain how each of the following will affect the relative values of the dollar and the French franc: Income growth higher in the United States than in France. Inflation higher in France than in the United States. A real interest rate higher in the United States than in France. please solve 2A European investor lives near one of his country’s borders. In Country A (where he lives), banks are offering an 8% interest rate and the inflation rate is 3%. Country B, on the other hand, has an inflation rate of 23%, and banks are offering 26% interest on deposits. a. What real or effective interest rate does the investor earn when investing in his own country? b. The investor believes that the currency of Country B will not change in its value relative to the value of the currency of Country A during this year. In which country would he get a larger effective interest rate? c. Suppose that he invests in a bank in Country B and that his prediction turns out to be wrong: the currency of Country B was devaluated 20% with respect to the exchange value of Country A’s currency. What effective interest rate would he obtain in this case?Current Account Value Exports of goods 107,941 Exports of services 44,133 Primary income receipts 36,063 Imports of goods 132,484 Import of services 29,443 Primary income payments 29,750 Net unilateral transfers -8,349 Capital account -63 Net acquisition of financial assets 20,972 Net incurrence of liabilities 54,471 Financial derivatives 0 Statistical discrepancy Based on the table above, the balance of goods is