Exploring Macroeconomics
8th Edition
ISBN: 9781544363332
Author: Robert L. Sexton
Publisher: Sage Publications
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Question
Chapter 21, Problem 10P
To determine
To classify:
The given items as credits or debits in the US balance of payment accounts.
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Students have asked these similar questions
1. What is the exchange rate between the U.S. and Germany? Has there been appreciation or depreciation of the U.S. dollar relative to Germany's currency?
2. As a manager, how does this affect your decision to expand into Germany? Will it affect your costs or ability to produce in Germany?
3. Would you recommend your firm expand into Germany? If so, would you produce the product/service in Germany? Would you expand to sell the product/service to a new target market? If you don’t think your firm should expand into Germany, why?
Q1-18
In balance-of-payments accounting, the acquisition of a foreign production facility by a Canadian firm is a ________ item in Canada's balance of payments. The deposit of funds in a foreign bank account by a Canadian citizen is ________ item in Canada's balance of payments.
a. debit / a credit
b. debit / also a debit
c. credit / also a credit
d. credit / a debit
You own a local company. In the past year, you successfully expanded your sales market into Europe, and you now have profits and
cash denominated in euros. You want to convert the euros to your home country currency to repatriate the profits and pay taxes. You are
a. not required to convert the euros to the home currency to pay taxes.
b. a demander of the euro in the foreign exchange market.
c. a supplier of your home country's currency in the foreign exchange market.
d. a demander of your home country's currency in the foreign exchange market.
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