If Australia has a current account deficit, then:Select one:O a. both B and C apply.O b.O C.O d.O e. the capital account will also be in deficit.we must sell domestic assets overseas to pay for it.we must sell more exports to pay for it.we will have a capital account surplus of the same amount.

A current account is an account that records all of the transactions that occur in relation to the…

If Australia has a current account deficit, then: Select one: O a. both B and C apply. O b. we must sell domestic assets overseas to pay for it. we must sell more exports to pay for it. O c. O d. we will have a capital account surplus of the same amount. Oe. the capital account will also be in deficit.

If Australia has a current account deficit, then: Select one: O a. both B and C apply. O b. we must sell domestic assets overseas to pay for it. we must sell more exports to pay for it. O c. O d. we will have a capital account surplus of the same amount. Oe. the capital account will also be in deficit.

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 18SCQ: How did large trade deficits hurt the East Asian countries in the mid 1980s? (Recall that trade...

See similar textbooks

Similar questions

Who receives the greatest benefit from a trade deficit? O Foreign consumers O Domestic farmers exporting agricultural products O Domestic firms in industries with significant imports O Domestic individuals who own stock Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.
a. Describe what is happening to the country’s capital account of the balance of payments prior to government changing its tack on supporting the value of the currency? Which items in the capital account are likely to change and how will they change? b. What is likely to happen to the country’s real exchange rate initially and after the government changes its policy stance with respect to supporting the currency? Please justify your answer. c. What happens to the current account balance right after the oil price shock and after the government stops supporting the currency? What items of the current account are likely to change and why? d. How is the market for non-tradables in the domestic economy affected in these two stages?
The macroeconomic view of a trade deficit implies that, other things equal, the imposition of a tariffwill reduce South Africa's trade deficit A Because exports will be promoted and imports cannot possibly changeB Because imports will be reduced and exports cannot possibly changeC Only if the tariff has no impact on South Africa's spending or incomeD Only if the tariff leads to increased income in South Africa relative to its spending
An example of a deficit item on the u.s. balance of payments is 1) the sale of a spark plug made by aus. firm in Midigan to a Nissan plant n Tennessee. 2) the payment of a dividend by a British firm to a us, family, O 3) the purchase of Japanese yen by a us, firm, 4) a deposit in a bank in Chicago by the government of Saudi Arabia.
Imagine that the economy of Germany finds itself in the following situation: the government budget has a surplus of 1 of Germanys GDP; private savings is 20 of GDP; and physical investment is 18 of GDP. Based on the national saving and investment identity, what is the current account balance? If the government budget surplus falls to zero, how will this affect the current account balance?
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.)
Imagine that the U.S. economy finds itself in the following situation: a government budget deficit of 100 billion, total domestic savings of 1,500 billion, and total domestic physical capital investment of 1,600 billion. According to the national saving and Investment Identity, what will be the current account balance? What will be the current account balance if Investment rises by 50 billion, while the budget deficit and national savings remain the same?
In the mid- to late 1970s, the yen appreciated in valuerelative to the dollar, even though Japan’s inflation ratewas higher than America’s. How can this be explainedby improvements in the productivity of Japanese industry relative to U.S. industry?
A6 How long a country can sustain a surplus or deficit on its long-term capital account, are there any limits? Explain this. Should Americans worry about the size of the deficit in the current account of the US balance of payments? Also, Is there a limit to how long a country can sustain a surplus or deficit on its current account? elaborate it.
true/false , explain A pro-savings policy by the US would likely reduce the US trade deficit.
If the US dollar appreciates in value vis-à-vis the NZ dollar, then, Group of answers. Exporters of goods from NZ to the US are worse off since NZ goods are now relatively more expensive. Tourists from NZ in the US are better off since their NZ dollars do not buy as much in the US as they used to. The US students who come to Auckland for an exchange semester are better off. NZ importers of US goods are better off since US goods are now relatively cheaper.
True or False? “U.S. exports create a demand for foreign currencies; foreign imports of U.S. goods create a supply of foreign currencies.” Explain. Would a decline in U.S. consumer income or a weakening of U.S. preferences for foreign products cause the dollar to depreciate or to appreciate? Other things equal, what would be the effects of that depreciation or appreciation on U.S. exports and imports?