Q.1.2 A deficit on the current account of a country's balance of payments can be financed by a surplus: (1) Of exports over imports; (2) Of net gold exports; (3) On the financial account; (4) On the trade balance.
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Q: Q.1.2 A deficit on the current account of a country's balance of payments can be financed by a…
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- Suppose that during a recent year for the United States, merchandise imports were $2 trillion, unilateral transfers were a net outflow of $0.2 trillion, service exports were $0.2 trillion, service imports were $0.1 trillion, and merchandise exports were $1.4 trillion. What was the merchandise trade deficit? What was the balance on goods and services? What was the current account balance?For the past year, a country has 200 million of exports of goods and services, 160 million of imports of goods and services, 60 million of income received from foreigners, and − 40 million of net unilateral transfers. What is the range of values for income paid to foreigners, so that each of the following would be true? a. The country has a current account surplus. b. The country has a deficit for its goods and services balance. c. The country is a net borrower from the rest of the world.You have the following annual figures for the New Zealand economy. Investment expenditure $40.6 billion Net Exports $3.6 billion Net Foreign Income -$9.5 billion The current account balance is equal to $____billon (use 1 d.p. and a negative sign if the balance you have calculated is a deficit). New Zealand domestic savings is equal to $____billon (use 1 d.p.). Suppose that the government introduces a policy that bans foreign investment in New Zealand. If that happens then (everything else held constant) we would expect to see the current account balance -rise -remain the same. -fall -become harder to predict Suppose that along with the above policy, the government also wishes to see investment levels maintained. If that is to occur, what else must be happening in the economy? - The Government must raise taxes. - Firms must be offered incentives to invest. - New…
- Exports $750 Imports $600 Net income from abroad -$225 Net unilateral transfers $30 Based on the data above, what is the current account and financial/capital account balance? The current account is in deficit, and the financial/capital account is in surplus. The current account and financial/capital account are both in deficit. The current account and financial/capital account are both in surplus. The current account is zero, and the financial/capital account is in surplus.The table below gives the data about Etruria's balance of payments. (All figures are in billions of dollars.) Foreign investment in Etruria 82 Secondary (transfers) income received from abroad 13 Primary (investment) income received from abroad 9 Imports of goods and services 148 Exports of goods and services 152 Secondary (transfers) income paid abroad 8 Etruria investment abroad 64 Primary (investment) income paid abroad 25 a. What is the value of the balance of trade? $ b. What is the balance on the current account? Remember to enter a minus (−) sign to indicate negative values. c. What is the balance on the capital account? d. Is there a balance of payments surplus or deficit? How much?Q.1.10 which of the following statements is correct? (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 the South African balance of payments. (2) When someone purchases a second-hand car, the transaction is included in the calculation of GDP in the year the sale took place. (3) A deficit on the current account of the balance of payments indicates that the 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.
- Suppose that during a recent year for the United States, merchandise imports were $2 trillion, unilateral transfers were a net outflow of $0.2 trillion, service exports were $0.2 trillion, service imports were $0.1 trillion, and merchandise exports were $1.4 trillion. a. What was the merchandise trade deficit? b. What was the balance on goods and services? c. What was the current account balance?Question: How is this likely to affect economies that are heavily dependent on oil imports? a) Decrease in inflation b) Increase in their trade deficits c) Increase in their exports d) Decrease in their current account deficitsQuestion 3Explain why a country can have a large trade deficit combined with a current account surplus. In explaining this, provide at least three transactions in the current account besides imports and exports. Explain how current transactions listed in this year’s capital account have implications for transactions in the current account in future years. Provide at least three examples. Suppose that a country has a current account deficit. Explain the three ways in which that deficit can be offset.
- In the past year, South Africa has maintained a significant deficit in its balance of payments. Discuss the concept of balance of payments, the potential reasons behind the persistent deficit, and the implication thereofInternational Transaction Amount, Billions of $ Services imports -150 Merchandise exports 100 Unilateral transfers (net) -20 Merchandise imports -210 Services exports 200 Income receipts/payments (net) 65 The table above gives hypothetical figures for the U.S. balance of payments. The country’s current-account balance shows a Group of answer choices deficit of $20 billion surplus of $15 billion deficit of $15 billion surplus of $10 billionAssume the United States has a trade surplus with Brazil and imposes new tariffs on Brazilian coffee, a major export to the United States. Describe the effect of the tariff on the equilibrium price and quantity of coffee in the United States. What affect will the tariff have on the current account balance in the United States? Explain. Brazil responds by imposing their own tariff on U.S.-made agricultural machinery. The Brazilian purchase of U.S. agricultural machinery is a debit to which subaccount of the Brazilian balance of payments? What will happen to the quantity of agricultural machinery produced by Brazilian manufacturers?
