Determine which account of the Balance-of-Payments is affected the following transaction: National Commercial Bank, a local company, pays US$1 million in dividends to foreign shareholders. Select one: O a. Current Account - Exports O b. Current Account - Imports Oc. Capital Account - Portfolio Investment O d. Capital Account - Foreign Direct Investment O e. Current Account - Transfers

Determine which account of the Balance-of-Payments is affected the following transaction: National Commercial Bank, a local company, pays US$1 million in dividends to foreign shareholders. Select one: O a. Current Account - Exports O b. Current Account - Imports Oc. Capital Account - Portfolio Investment O d. Capital Account - Foreign Direct Investment O e. Current Account - Transfers

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Open-economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 9PA

See similar textbooks

Similar questions

How did large trade deficits hurt the East Asian countries in the mid 1980s? (Recall that trade deficits are equivalent to inflows of financial capital from abroad.)
The following information on Ghana’s Balance of Payments Accounts for 2013 (million U.S. Dollars) is provided. CURRENT ACCOUNT US$ 1. Merchandise Exports ( £.o.b) 11,679.40 2. Merchandise Imports (£.o.b) -16,092.50 Trade balance -4,413.1 3. Services (net) -2,346.84 Receipts 3,539.40 Payments -5,886.24 4. Income (net) 4,155.98 Receipts -592.96 Payments 202.24 5. Current Transfers (net) 795.20 CAPITAL & FINANCIAL ACCOUNT 6. Capital Account 1,127.78 Capital Transfers 1,127.78 7. Financial Account Direct Investments 3,355.68 Portfolio Investments -87.28 Other Investments 1,737.96 Of which: Short term capital -164.12 Other capital investments 2,172.40…
Zeta Corporation is a Philippine ExportCompany. It sells its goods to the US.Assuming that the BSP prints morePhilippine peso bills, how will thesales of Zetabe affected? A. The decrease in money supply will increase the value of each peso, require less peso to get one USD, hence Zeta's sales in peso will decrease.B. The increase in money supply will increase the value of each peso, require less peso to get one USD, hence Zeta's sales in peso will decrease.C. The decrease in money supply will lower the value of each peso, require more peso to get one USD, hence Zeta's sales in peso will increase.D. The increase in money supply will lower the value of each peso, require more peso to get one USD, hence Zeta's sales in peso will increase.
Only like if no ai or downvoted for ai content Suppose that the equilibrium exchange rate between the United States and South African is 15.13 Rand per US dollar. Further suppose that the two countries are trading partners with each other. Inflation now rises in South Africa. Which of the following answer choices correctly represents the shift that would occur in the US foreign exchange market? The supply of US dollars would fall. The demand for South African Rands would rise. The supply of South African Rands would rise.
Currency Exchange Worksheet (#5)1. Let $1 =.78 €How much would a 20,000 € automobile cost in US$2. From #1, let the SUS appreciate by 5%,Now how much does the auto cost?3. Let $1 = .78 € and $1 = 6.3 CNY (Chinese Yuan Renminbi)How many CNY will be purchased for 1 €4. Given #3, how many € would it cost for a European importerto purchase 300 Chinese computers @, 3000 CNY per computer?5. From #4, let there be a 5% appreciation in the CNY against the EuroNow how much do the computers cost in €?
The demand for Australian dollars in the foreign exchange market equals 14000 – 3000e and thesupply of Australian dollars in the foreign exchange market equals 2000 + 2000e, where e is thenominal exchange rate expressed in euros per Australian dollar. If the Australian dollar is fixed at 2euros per Australian dollar, then to maintain this fixed rate, what is the required change in theReserve Bank of Australia’s holdings of euros? 1increase by 4000 euros 2decrease by 2000 euros 3decrease by 4000 euros 4increase by 2000 euros
8) Suppose that the government has imposed the tax on the foreign investorsper currency they pay for financial assets issued by the country. Discuss itsimplications on the current foreign exchange rate?
determine the purchasing power of the country China for aconsumer good that they would buy from their Canadian trading partner. Also, calculate whatCanada’s purchasing power is with a country that they import from. See example below on Coca Colaand Mexico. Purchasing Power Example In the example of the picture, if a Canadian company operating in Mexico were to pay its Mexican employeesthe equivalent of $10/hour CAD (or 100 pesos/hour according to our fictional exchange rate), theMexican employee would actually enjoy greater purchasing power (the ability to acquire 20 colasversus only 10 colas) than his/her Canadian counterparts.
1. Exporter A offered woolen blanket at price USD 1000 M/T CIFC 3% Hamburg. If the freight costs is USD 80 per M/T, and insurance premium is USD 10 per M/T, the purchasing price of the product is RMB 4000 per M/T, the domestic direct and indirect costs per M/T will be account for 15% of purchasing price, please calculate the total costs of export, the net income from the export and the exporting conversion cost of foreign exchange. If the current exchange rate is 6.5 RMB/USD, is it profitable from the export?
8. Suppose that last year, the nominal exchange rate between the Japanese yen and the British pound was ¥150.0 per £1.0, one unit of Japanese output cost ¥1300, and one unit of British output cost £8.0.a. What was the real exchange rate between the U.K. and Japan last year, expressed as the cost of British output (i.e. – the quantity of Japanese output that exchanges for 1 unit of British output)? In which country were goods more expensive last year?
Purchasing-power parity holds between the nationsof Ectenia and Wiknam, where the only commodityis Spam.a. In 2020, a can of Spam costs 4 dollars in Ecteniaand 24 pesos in Wiknam. What is the exchange ratebetween Ectenian dollars and Wiknamian pesos?b. Over the next 20 years, inflation is expected to be3.5 percent per year in Ectenia and 7 percent peryear in Wiknam. If this inflation comes to pass,what will the price of Spam and the exchangerate be in 2040? (Hint: Recall the rule of 70 fromChapter 27.)c. Which of these two nations will likely have ahigher nominal interest rate? Why?d. A friend of yours suggests a get-rich-quickscheme: Borrow from the nation with the lowernominal interest rate, invest in the nation with thehigher nominal interest rate, and profit from theinterest-rate differential. Do you see any potentialproblems with this idea? Explain.
Discuss the drawbacks of primary-sector-intensive outward-looking trade policies. How didthe Prebisch-Singer hypothesis critique such policies and support the implementation of importsubstitution industrialization (ISI) strategies? Also discuss the similarities and differencesbetween export-oriented industrialization strategies versus ISI. Which of these policies would beassisted by an undervalued exchange rate? Explain .