Liberia is an economically-challenged country that faces a huge crisis of malnutrition. A recent study has alerted wealthy nations to the dismal state of the country. Many of these countries have volunteered to send large amounts of funds to help improve the health conditions of the Liberian population and ensure the availability of healthy food From the above information we understand that: a) Liberia is fasing a balance of payments surplus. b) Liberia is facing a balance of payments deficit. c Liberia is facing a trade surplus. d) Liberia is facing a balance of payments

Liberia is an economically-challenged country that faces a huge crisis of malnutrition. A recent study has alerted wealthy nations to the dismal state of the country. Many of these countries have volunteered to send large amounts of funds to help improve the health conditions of the Liberian population and ensure the availability of healthy food From the above information we understand that: a) Liberia is fasing a balance of payments surplus. b) Liberia is facing a balance of payments deficit. c Liberia is facing a trade surplus. d) Liberia is facing a balance of payments

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 44P: Imagine that the U.S. economy finds itself in the following situation: a government budget deficit...

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Q.1.10 Which of the following statements is correct? (2)(1) When a British firm invests in a bicycle manufacturing facility in South Africa,the amount concerned is entered as an inflow on the current account of theSouth African balance of payments.(2) When someone purchases a second‐hand car, the transaction is included inthe calculation of GDP in the year the sale took place.(3) A deficit on the current account of the balance of payments indicates thatthe country exported more than it imported during the period in question.(4) In the base year, the value of nominal GDP is equal to the value of real GDP.
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Suppose the Current Account has a deficit of 300 and we invest 200 overseas. What inflow of foreign investment is needed to provide Balance of payment equilibrium? Suppose we import 500 and the capital account has a deficit of 400. What level of exports would generate Balance of Payment equilibrium? Suppose we are in Balance of Payment equilibrium with a trade deficit of 300. What happens to the trade deficit if the public sector sells 100 in securities to the foreign sector to finance the budget deficit? True or False and explain: Currently the foreign sector holds 28.5% of our $24 trillion national debt. If we reduced the foreign sectors holding our trade balance would improve. True of False and explain: Investment is critical to economic development. Developing countries have immature domestic financial sectors, therefore they should pursue trade policies designed to produced trade surpluses.
Suppose that Argentina's dollar-denominated external assets and liabilities are $10 billion and $100 billion, respectively, and its Argentine peso-denominated external assets are 70 billion pesos (P) and peso-denominated external liabilities are 50 billion pesos (P). Suppose further that Argentina fixes its exchange rate at P1.5 = $US1. a) What is the peso value of Argentina's total external wealth? Is it a net debtor or creditor? b) Suppose that Argentina changes its exchange rate to P2.3 = $US1. How does the external wealth of Argentina change when this occurs?
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During the year, Japan had a current-account surplus of 98 billion. What is the gap between Japan’s national expenditure and its national income? Explain. What is the gap between Japan’s savings and its domestic investment? Explain. Suppose the Japanese government’s budget ran a 22 billion surplus during the year. What can you conclude about Japan’s private savings-investment balance for the year? Explain.