If a countrys official financial account is equal to and its unofficial financial account is equal to $500, then its current account is equal to $1300.

Q: What is meant by the balance of payment? Why would it be useful to examine a country’s balance of…

A: please find the answer below.

Q: A television costs $500 in the United States. The same television costs 312.5 euros. If purchasing…

A: Spot exchange rate: It is the amount on which one currency will be traded for another today.

Q: How would each item be counted in the US balance of payments? Give sign, category (e.g. export, FDI,…

A: Macroeconomics is a part of economics that deals with production, decision and allocation concerning…

Q: Define and explain the importance of Purchasing Power Parity

A: Purchasing Power Parity Theory was put forward by Gustav Cassel in the years following World War1.…

Q: True or False: While the purchasing power parity concept is interesting, it doesn't give us a good…

A: The purchasing power parity theory states that the value of goods and services in two different…

Q: The balance of payments of a country is based on the difference between the fund inflows and…

A: When talking about the balance of payment account, it is the account of a country to make record of…

Q: # Foreign investment are recorded in the capital account of Balance of payment. True/False

A: Balance of payment refers to the record of the international transactions that the domestic country…

Q: Which of the following are not a part of capital Account of Balance of Payment a. Foreign Loans b.…

A: As the name implies, a country's balance of payments (BOP) shows how much money has flowed from one…

Q: What is the capital and financial account balance... billion dollars The official settlements…

A: The balance of payment is the record of all cash inflows and outflows that occurred in the country…

Q: Evaluate the difference between a strong and weak currency situation of a country.

A: A solid dollar implies that the U.S. dollar has ascended to a level that is close generally high…

Q: POLICY ON FOREIGN EXCHANGE INTERVENTION AND MECHANICS USED IN INTERVENTION TO CONTROL EXCHANGE…

A: A foreign exchange intervention is a monetary policy tool in which a central bank actively…

Q: Foreign investment is counted under capital account of balance of payments.  True/False

A: In international macroeconomics the capital account of the balance of payment is account which keeps…

Q: Changes or variations in Foreign Exchange Rates can create a lot of uncertainties for businesses. As…

A: Most businesses import and export their goods all over the world because we live in a global…

Q: There is no difference between balance of trade and balance on current account of balance of payment…

A: According to the given question Relatively stated that the balance of trade which is also known by…

Q: a nation's currency is said to appreciate when exchange rates change so that a unit of its currency…

A: Answer: True, Explanation: If the currency of a  nation appreciates then it buys more units of…

Q: uncovered interest parity

A: The interest rate parity implies that the expected return from two countries will equalized by the…

Q: car for $26,000. Volkswagen produces and sells a compact car for 19,000 euros. If the exchange rate…

A: ‘Exchange Rate’ means the price of the currency of one country in terms of foreign currency. It can…

Q: Explain the situation in terms of balance of payments and the effect of Sri Lanka’s economic crisis…

A: If a country cannot support its imports through capital exports, it will have to deplete its…

Q: 19. In balance-of-payments accounting, the sale of a foreign production facility by a SA firm is a…

A: "Since you have asked multiple questions, we will answer only first question for you. If you have…

Q: PPP and IRP are different because one always deviates from parity and other does not ever deviate…

A: Parity refers to the same exchange rate, price, purchasing power, and earnings for all people. It…

Q: A strong US dollar tends to   A. Reduce exports to foreign buyers   B. Reduce imports…

A: When the dollar value increases, then it makes import cheaper and export costlier. The reason is…

Q: In balance-of-payments accounting, the acquisition of a foreign production facility by a Canadian…

A: In the balance of payments account of a country, any transaction that brings in goods foreign assets…

Q: With a flexible exchange rate system if the trade balance is $10 million, while the balance of the…

A: The difference between Export and import=Trade balance=$10 million and Net change in assets and…

Q: If the current U.S. interest rate is 10% and PPP is expected to hold, what should be the Canadian…

A: An economic theory known as interest rate parity (IRP) says the difference between the forward and…

Q: Write down the causes of balance of payments deficit in Pakistan.

A: BOP is the net export and import of a goods, services, capital in year. BOP deficit takes place…

Q: In quoting exchange rates: a. One should always quote these as units of foreign currency over a unit…

A: A direct quotation is a foreign exchange rate, in which the value of a foreign currency is…

Q: what are some factors affecting the quantity of US dollars supplied in the foreign exchange market?

A: The foreign exchange market helps in the determination of the exchange rate for various currencies.…

Q: Uncovered interest parity condition (UIP) says that the expected rate of depreciation of the one…

A: Uncovered Interest Parity Condition is helpful in foreign exchange and currency trading.

Q: What does it mean by Import surcharge in a balance-of-payments emergency when pertaining to…

A: Import duty is the tax levied on the imported goods and the extra amount charged by the government…

Q: Identify each transaction by whether it belongs in the US current account or financial account: An…

A: Balance of payment includes both current account and financial account.

Q: Choose the correct ordering of countries in purchasing power parity adjusted per capita income (from…

A: The purchasing power parity is the theory which states that the exchange rates between the two…

Q: Discuss currency conversion as a function of foreign exchange market. Explain your answer with…

A: Foreign exchange market is a market where buying and selling of currency takes place between…

Q: The capital account balance is a nation's:    net investment income minus its net transfers…

A: The capital account is one of the components of the balance of payments account for a country. The…

Q: Alpha’s balance-of-payments data for 2016 are shown below. All figures are in billions of dollars.…

A: Balance of good shows the performance of an economy with respect to its trade of goods with foreign…

Q: Under a flexible exchange rate system, a decrease in the value of a domestic currency in terms of…

A: Decrease in value of domestic currency in terms of foreign currency is referred to as currency…

Q: Which is suitable exchange rate regime for desirable international business?

A: Exchange rate shows the value of one currency in terms of other currency. The two exchange rate…

Q: If a company believed that a nation was preparing to devalue its currency, the company should reduce…

A: Meaning of Macroeconomics: The term macroeconomics refers to the situation of economic and…