What is meant by current account deficit and current account surplus? State their significance

Q: Suppose that Country A developing country and Country B is a developed country and Country B's…

A: There is appreciation of exchange rate in country A.

Q: Explain, with the aid of a graph, the effect on the rand/dollar exchange rate and the equilibrium…

A: The exchange rate communicates the bilateral price of the foreign currency in terms of the home…

Q: You have the following annual figures for the New Zealand economy.             Investment…

A: Increase of investment is includes the increment of plants in equipment's in the economy and…

Q: Comment on the following statement: "Since the United States imports more than it expona. It is…

A: The balance of payment (BOP) is the financial statement of a country which includes all its…

Q: Explain why a nation with a current account deficit is a net external borrower, while a nation with…

A: The account that represents exports and imports of goods and services of countries is known as the…

Q: Suppose that China is a developing country and United States of America is a developed country. In…

A: Exchange rate is the price of a currency of one country in terms of the currency of another country.…

Q: What is the difference between foreign sales revenues and foreign purchase expenses called? A)…

A: In the international market, as the home country makes a record of all the inflow and outflow of…

Q: Describe the foreign exchange market and its components.

A: Foreign exchange market- it is a market, which is also known as forex and currency market. It is a…

Q: Describe two measures that can used by the government to correct a deficit on the current account of…

A: Balance of payment: The balance of payments is a database of all foreign trade and financial…

Q: Explain, with the aid of a graph, the effect on the rand/dollar exchange rate and the equilibrium…

A: The exchange rate communicates the bilateral price of the foreign currency in terms of the home…

Q: Why could a current account deficit stimulate an economy? List at least two reasons and explain with…

A: Current account deficit The current account deficit is a situation in the economy of a country…

Q: What are the automatic adjustment mechanisms operate to correct a deficit in the balance of payments…

A: Fixed Exchange Rate refers to the regime imposed by the reserve bank or by the central government…

Q: The following figure shows the Current Account Balance (similar to the Trade Balance) of Japan…

A: The balance of payments (BOP) is known to summarize all of the transactions which…

Q: The figure below shows the flow of goods, services, and payments between Kenya (home country) and…

A: 1) The top section keeps track of the flow of exports and imports, as well as the payments…

Q: - Explain very briefly about elasticity approach, national income approach, absorption approach, and…

A: Elasticity approach  The elasticity approach tries to predict the outcome policy changes will have…

Q: Discuss the Foreign Exchange Markets and its impact on the global economy

A: The key role of the forex market is to transfer funds for the settlement of payments from one…

Q: A Current account deficit often raises the opposition of protectionists who think that a current…

A: There are other points of disagreement, including the definition of a current account deficit or…

Q: ings by businesses 12 percent Private investment 18 percent Net taxes paid 15 percent Government…

A: * ANSWER :-

Q: INSTRUCTIONS: For each of the following, explain the effect on a) current account OR capital account…

A: The nations around the globe are involved in the trading activities with each other. The nations…

Q: How do automatic adjustment mechanisms operate to correct a deficit in the balance of payments under…

A: Budget Deficit: A budget deficit arises when there is excess expenditure against the revenues. Or…

Q: The current account includes changes in a. net exports, net foreign investment income, and import…

A: Trade means the exports and imports of goods and services. It means the net exports are positive if…

Q: Explain very briefly about elasticity approach , national income approach , absorption approach ,…

A: The balance of payments is a system used by countries to keep track of all foreign monetary…

Q: Suppose that during a recent year for the United States, merchandise imports were $2 trillion,…

A: A merchandise trade deficit occurs when a country imports more goods than it exports in a given span…

Q: Comparison of Global Current Account surpluses (green and blue bars) and Global Current Account…

A: ANSWER   The symmetry in the chart can be described by the concept of international trade or Open…

Q: You have the following annual figures for the New Zealand economy. Investment…

A: The Saving  = Private Saving +Public Saving. The current accounts of BOP includes the net export,…

Q: If the balance on the current account is $8.42 billion and the balance on the financial account is…

A: Given; Balance of current account= $8.42 billion Balance of financial account= $7.43 To find:-…

Q: Define the term balance of trade.

A: Trade is the exchange of goods and services in return for money.

Q: Based on the table below, which of the following is likely to be true? a. From the first period to…

A: I the mentioned question, we have to answer as per the data present in the table. Lets discuss one…

Q: What is the meaning of a surplus (deficit) on the current account balance? What economic…

A: Current Account Balance A balance of payment is a statement that records all the transactions of a…

Q: Explain the impact of the changes in the following variables on Current Account balance   a)…

A: Note: As per the guidelines we will answer only three subparts. Please resubmit the question again…

Q: Explain the relationship between the current account balance given by exports (X) minus imports (M)…

A: Note:- Dear learner you have asked multiple questions, as per our policy we have solved only first…

Q: Why is a current account surplus equivalent to foreign investment ？

A: The countries worldwide gets involved in the sale and purchase of the goods, services, inputs of…

Q: A country finds itself in the following situation: a government budget deficit of $700; total…

A: ANSWERThere are two main sources for the supply of financial capital in the U.S. economy: saving by…

Q: Show, using algebra, that the current account balance is: (i) the difference between saving and…

A: Current account balance is actually under the balance of payment theory. Now this account measures…

Q: For each of the following, explain the effect on a) current account OR capital account b) balance of…

A: National income is the total amount of money that is earned in a country. National Income = C + I+ G…