Indicate whether each of the following items represents a debit or a credit of the US balance of payments: The hiring of a Canadian trucking company by a US firm to transport horseradish into Canada. O Debit O Credit
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- Suppose U.S. interest rates decline compared to the rest of the world. What would be the likely impact on the demand for dollars, supply of dollars, and exchange rate for dollars compared to, say, euros?What is the difference between a floating exchange rate, a soft peg, a hard peg, and dollarization?What is the foreign exchange market?
- A British company that exports shoes to Switzerland wants to exchange the Swiss franc (SF) for British pounds. If the US Dollar Rate of the two currencies is disclosed as follows: £0.5120-0.5130/US$, SF1.1230-1.1240/US$ Calculate and disclose the purchase/sale exchange rate between the two currencies as £/SF by the Cross Rate. If the export price received by a British company is SF10,000, what is the amount of British pound after the exchange?5) Indicate whether each of the following creates a demand for or a supply of European euros in foreign exchange markets: a. Liberty purchases an Airbus plane assembled in France b. Mercedes-Benz decides to build an assembly plant in Knoxville c. A Liberty student decides to spend a year studying at the Sorbonne in Paris d. An Italian manufacturer ships machinery from Rome to Venice on an Egyptian freighter e. It is widely expected that the euro will depreciate in the near futureShow how each of the following would affect the U.S. balance of payments. Include a description of the debit and credit items, and in each case identify which specific account is affected (e.g., imports of goods and services, IM; exports of assets, EXA; and so on. (a) A U.S. airplane manufacturer imports $600,000 in parts from a Canadian firm. It uses a U.S. bank account to pay for the parts. (b) The Bank of England (U.K. central Bank) buys $2 million in U.S. Treasury bonds from an American securities firm. (e) A U.S. firm exports $10,000 worth of goods to the United Kingdom, payable in 3 months. Please draw a table like the sample image (including arrows which indicate the increase or decrease) and explain a bit under the table (if possible, please elaborate a bit more because i want to understand). Thank you so much.
- Show how each of the following would affect the U.S. balance of payments. Include a description of the debit and credit items, and in each case identify which specific account is affected (e.g., imports of goods and services, IM; exports of assets, EXA; and so on. (c) An Italian tourist charges $400 to his MasterCard (issued by an Italian bank) for a hotel room in New York City. (d) A Chinese catering company purchases $30,000 in helium tanks from a U.S. welding firm. The Chinese catering company uses deposits from a bank in China. (f) The United States donates $8 million in medical and food supplies to Lebanon following a month-long war. Please draw a table like the sample image (including arrows which indicate the increase or decrease) and explain a bit under the table (if possible, please elaborate a bit more because i want to understand). Thank you so much.Show how each of the following would affect the U.S. balance of payments. Include a description of the debit and credit items, and in each case identify which specific account is affected (e.g., imports of goods and services, IM; exports of assets, EXA; and so on. e. The U.S. buys locomotives from Mexico for a value of $100,000, and agrees to pay 18 months later. f) A U.S. firm pays $1,000 in dividends to a Korean investor. g. You meet you friend from Sweden and exchange a $50 watch produced in U.S. for a $50MP3 player produced in Sweden. Please draw a table like the sample image (including arrows which indicate the increase or decrease) and explain a bit under the table (if possible, please elaborate a bit more because i want to understand). Thank you so much.Define each of the following terms: e. Interest rate parity; purchasing power parity
- 5. A dirty float is called so because the central bank of a country will intervene in the foreign exchange market to try to maintain the value of its currency if it depreciates too rapidly against an important reference currency. A. TrueB. False2. When individuals and entities carry out activities that affect their home country and an overseas country these transactions affect particular accounts domestically and overseas. find from the following given situation and indicate what the effects on the both the domestic and overseas countries and their balance of payments :(a) An Australian manufacturer borrowed $800,000 from an Australian bank to build a manufacturing plant in Croatia.(b)An Australian company paid $55,000 dividends to a UK Investor.(c) An Australian company purchased a trademark paying $80,000 to the US Company. question is complete.Explain the current system of managed floating exchange rates.