A consumer living in Ithaca, NY buys $1,000 dollars worth of toys from a company that manufactures toys in Tokyo, Japan. If we consider the US Balance of Payments and assume all foreign exchange transactions are between private citizens, this purchase results in to net exports and to private foreign assets in the US. a) a debit; a credit b) a credit; a debit C) a credit; a credit D) a debit; a debit

A consumer living in Ithaca, NY buys $1,000 dollars worth of toys from a company that manufactures toys in Tokyo, Japan. If we consider the US Balance of Payments and assume all foreign exchange transactions are between private citizens, this purchase results in to net exports and to private foreign assets in the US. a) a debit; a credit b) a credit; a debit C) a credit; a credit D) a debit; a debit

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter36: Exchange Rates And Financial Links Between Countries

Section: Chapter Questions

Problem 14E

See similar textbooks

Similar questions

Assume the following exchange rates Value of Canadian Dollar in U.S dollars $.92 value of New Zealand dollar in U.S dollars $.32 Value of Canadian dollar in New Zealand dollars NZ $3.00 Given this information, starting with U.S dollar, you and others can perform triangular arbitrage by________. a. Using U.S dollar to buy New Zealand dollar at $.32. b. Using U.S dollar to buy Canadian dollar at $.92 c. Using New Zealand dollar to buy Canadian dollar at NZ$3.00 d. Using U.S dollar to buy Canadian dollar at NZ$3.00
Suppose you are a British venture capitalist holding a major stake in an e-commerce start-up in Silicon Valley. As a British resident, you are concerned with the pound value of your U.S. equity position. Assume that if the American economy booms in the future, your equity stake will be worth $901, and the exchange rate will be $1.28/£. If the American economy experiences a recession, on the other hand, your American equity stake will be worth $817, and the exchange rate will be $1.43/£. You assess that the American economy will experience a boom with a 50 percent probability and a recession with the remaining probability.Estimate the expected value of the property in GBP (as XXX.XXX)
Exports of goods and services 1,872 Imports of goods and services 2,375 Net unilateral transfers -99 Net Investment Income 170 Capital Account -7 Net US acquisition of financial assets 958 Net US incurrence of liabilities 1,391 Net financial derivatives -14 Based on the table above, the balance on the financial account is Group of answer choices 454 447 -14 -447
Suppose that today the exchange rate between the U.S. dollar and the Chinese yuan is $1 = 6.2 yuan. If next week the exchange rate is $1 = 7 yuan, it is clear that: A)The yuan has depreciated relative to the dollar. B)The dollar has depreciated relative to the yuan. C)The dollar has appreciated relative to the yuan. D)Both currencies have appreciated
Exports of goods and services 1,872 Imports of goods and services 2,375 Net unilateral transfers -99 Net Investment Income 170 Capital Account -7 Net US acquisition of financial assets 958 Net US incurrence of liabilities 1,391 Net financial derivatives -14 Based on the table above, the balance on the current account is Group of answer choices 673 503 -432 -447 -503
Assume all transactions are between private individuals. A U.S. citizen buys a Japanese bond. This transaction will be entered in the US balance of payments as _______________. a) an increase in investment income and an increase in foreign private assets in the US b) a decrease in private US assets abroad and an increase in foreign private assets in the US c) an increase in imports and an increase in foreign private assets in the US d) an increase in private US assets abroad and an increase in foreign private assets in the US
Based on the table provided, answer the following questions: Compute the U.S. dollar–yen exchange rate E$/¥ and the U.S. dollar–Canadian dollar exchange rate E$/C$ on January 20, 2016, and January 20, 2015. What happened to the value of the U.S. dollar relative to the Japanese yen and Canadian dollar between January 20, 2015, and January 20, 2016? Compute the percentage change in the value of the U.S. dollar relative to each currency using the U.S. dollar–foreign currency exchange rates you computed in (a). Using the information in the table for January 20, 2016, compute the Danish krone–Canadian dollar exchange rate Ekrone/C$.
Suppose Americans suddenly develop a strong taste for Canadian whiskey. What happens to the demand for Canadian dollars in the foreign exchange market? What happens to the value of Canadian dollars in the foreign exchange market? What about U.S. dollars? What happens to the quantity of net exports in Canada, other than whiskey, as a result of your answer in part b? What about the U.S.?
Suppose a country has an overall balance of trade so that exports of goods and services equal imports of goods and services. Does that imply that the country has balanced trade with each of its trading partners
When Great Britain voted to leave the eurozone, the pound depreciated 17% against the dollar. It also raised fears that the eurozone, which uses the euro as a common currency, would fall apart. Suppose that the dollar is considered safer than the euro, given these conditions. The following graph shows the market for dollars, with the quantity of dollars measured along the horizontal axis and the price of dollars in terms of euros measured along the vertical axis (in other words, the euro/dollar exchange rate).
Suppose that yesterday, the U.S. dollar-Japanese yen exchange rate was $1=¥0.553546. The price of one Japanese yen in terms of a U.S. dollar was ___ . Suppose that today the U.S. dollar-Japanese yen exchange rate falls to $1=¥0.533585 for one dollar. This means that between yesterday and today, the U.S. dollar has ___ against the Japanese yen. The price of a Mexican peso in terms of the U.S. dollar is now ___ .
In answering the question, you should emphasize the line of reasoning that generated your results; it is not enough to list the results of your analysis. Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. Suppose that Singapore wants to return the exchange rate to 1 euro = 0.58 Singaporean dollars. Should the Singaporean central bank buy or sell euros in the foreign exchange market? Instead of buying or selling euros, what domestic open-market operation can the Singaporean central bank use to achieve the same result? Explain.