Why does the trade balance and the current account balance track so closely together over time?

Q: Which of the following is not part of the Current Account of the Balance of Payments? Answers:…

A: Balance of payment account refers to the statement of economic transactions between two countries.…

Q: Based on the transactions in the above table, what is the change in the U.S. current account…

A: Current account balance = Export of goods and services – Import of goods and services + Net…

Q: Briefly define the following terms: cost-push inflation, and balance of payments.

A: Economics is the study of production, allocation and distribution of resources in a society. It has…

Q: In the BOP accounts, what are the four basic components of the current account? How can information…

A: Four basic components of current account in BOP include: Goods  Services Income and  Current…

Q: Does the level of the exchange rate matter in the long run? Why or why not?

A: When a country values its currency with another country’s currency then this situation is called…

Q: What is one of the ways governments can influence exchange rates?

A: the government uses the exchange rate tool to achieve multiple objectives such as full employments,…

Q: Explain how changes in various economic factors affect a country's current account balance.

A: The current account balance of a country exhibits its transactions with the rest of the world. It is…

Q: What could be the measures to correct disequilibrium in the balance of payments?

A: Depreciation is a term that refers to a rise in the price of a foreign currency or a decrease in the…

Q: Find the current account balance when the trade balance are 2,81,000 and the invisible balance are…

A: Generally in the given question Trade balance are given as = 281000 Invisible balance = 391000…

Q: WHAT IS THE IMPORTANCE OF EXCHANGE RATE IN OUR ECONOMY

A: Meaning of Macroeconomics: The term macroeconomics refers to the situation of economic and…

Q: How can exchange-rate targets lead to a speculativeattack on a currency?

A: The exchange rate targeting is the method by which a central bank intervenes in the market in order…

Q: What happens to the balance of trade if the nominal exchange rate depreciates?

A: According to the Marshall-Lerner condition if the exchange rate of a country depreciates it means…

Q: What does symmetrical adjustment of current account imbalances mean?

A: The Current Account is referred to as a country's exports and imports of goods and services and the…

Q: 3. Briefly discuss the following statement, explaining what is right or wrong about it: "The average…

A: 3) The statement explains that the current account balance of all countries in the world is in…

Q: What does an increase in international reserves mean

A: International reserves are the foreign currency reserves.Foreign reserves or the international…

Q: Find out any three saarc countries and find out their nominal exchange rate?

A: South Asian Association for Regional Cooperation (SAARC)  It is an intergovernmental organization…

Q: What are the three components of the Balance of Payments? Explain the relationship between the…

A: The balance of payment (BOP) demonstrates the record of all financial proceedings over a period of…

Q: What effect does a high exchange rate have on imports, exports, and that country's production?

A: The rate that measures the value of a nation’s currency in terms of another nation’s currency is…

Q: Is it more beneficial for a country to have a strong national currency or to have a weak national…

A: A national currency is one that a government issues through its central bank or other monetary…

Q: What do you mean by balance of trade?

A: There must always be a systematic record of all the transactions which are taking place between the…

Q: What are the three categories of transactions in the balance of payments? Give an example of each.

A: The balance of payments is considered to be a systematic record of all the transactions of a country…

Q: How reasonable is it for every country to follow policies aimed at increasing net exports?

A: Net exports are the difference between exports and imports of the country.

Q: The term “Balance of Trade” incorporates the measure of which of the following?Choose one answer.…

A: Balance of trade refers to the component in the international trade records where the transactions…

Q: When is exchange-rate targeting likely to be a sensiblestrategy for industrialized countries? When…

A: Under the exchange rate targeting strategy, the central bank intervenes to maintain a particular…

Q: What is balance of visible items in the balance of payments account called?

A: The balance of payments account of any country contains a number of components like balance of…

Q: How can a surge in exports and decrease in imports cause an increase in aggregate demand and what…

A: Aggregate demand is defined as the total demand of all final commodities and services at a given…

Q: In recent decades, has the US trade balance usually been in sede it, slurp is, or balanced?

A: The trade deficit is a situation in which the goods of other countries are given more priority than…

Q: How does an increase in government spending affects aggregate demand, investment, and net exports in…

A: In the small open economy, the capital inflow and outflow would have free movement because of…

Q: Define the term balance of trade.

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

Q: In relation to a country's economy, the more a country imports and the worse the current account…

A: Current account:- it is a record of a country's transactions of goods and services, net earnings on…

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: Current Spot Rates. Use the table | containing economic, financial, and business indicators to…

A: * ANSWER :-  * Using the below table from the given question: The relevant data to solve the…

Q: Explain why a country with fixed exchange rate and open financial markets has to give up its…

A: The theory that depicts that countries might tend to choose among options while making decisions…