Suppose the U.S. foreign assets are 73 percent of the U.S. GDP, and the U.S. foreign liabilities are 95 percent of the U.S. GDP. Moreover, suppose that 56 percent of U.S. foreign assets are denominated in foreign currencies, while all liabilities to foreigners are denominated in U.S. dollars. How will a 14 percent depreciation of the dollar affect foreigners' net foreign claims on the U.S. measured in U.S. dollars (as a percent of U.S. GDP)? (You will need a calculator. Round your answer to the whole percentage point, no decimals.) Foreigners will experience a net capital loss equal to percent of U.S. GDP.

Suppose the U.S. foreign assets are 73 percent of the U.S. GDP, and the U.S. foreign liabilities are 95 percent of the U.S. GDP. Moreover, suppose that 56 percent of U.S. foreign assets are denominated in foreign currencies, while all liabilities to foreigners are denominated in U.S. dollars. How will a 14 percent depreciation of the dollar affect foreigners' net foreign claims on the U.S. measured in U.S. dollars (as a percent of U.S. GDP)? (You will need a calculator. Round your answer to the whole percentage point, no decimals.) Foreigners will experience a net capital loss equal to percent of U.S. GDP.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter27: Multinational Financial Management

Section: Chapter Questions

Problem 5Q: If the United States imports more goods from abroad than it exports, then foreigners will tend to...

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