MICROECONOMICS >C<
20th Edition
ISBN: 9781308397153
Author: McConnell
Publisher: MCG/CREATE
expand_more
expand_more
format_list_bulleted
Question
Chapter 25, Problem 2RQ
To determine
The balance on capital and financial accounts.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
this question has three questions . What proportion of this countryās total gross capital formation (or investment) can be financed from national savings, and what part must be financed from external resources? What are the various forms these external resources could take? show in graph how the current account got a deficit of 12% GDP and the budget deficit of 3%.
Ā
Suppose a country has a large current account deficit (in the vicinity of 12% of GDP). It has a gross capital formation rate of 28% of GDP. The country has an overall budget deficit of 3% of GDP. The share of Household and NPISHs Final Consumption Expenditure is 68% of GDP and that of General Government Final Consumption Expenditure is 12%. What proportion of this countryās total gross capital formation (or investment) can be financed from national savings and what part must be financed from external resources? What are the various forms these external resources could take?
Suppose that the price of a commodity is 3 50 in
Suppose that the price of a commodity is $3.50 in the United States and €4 in the European Monetary Union and the actual exchange rate between the dollar and the euro is R = $1/€1, but, the equilibrium exchange rate R′ = $0.75/€1.
(a) Will the United States import or export this commodity?
(b) Does the United States have a comparative advantage in this commodity?
Suppose that the price of a commodity is 3 50 in
The following information on Ghanaās Balance of Payments Accounts for 2013 (million U.S.Ā Ā Ā Ā Ā Ā Ā Ā Dollars) is provided.
CURRENT ACCOUNT
US$
1.Ā Ā Ā Ā Ā Ā Merchandise Exports ( Ā£.o.b)
11,679.40
2.Ā Ā Ā Ā Ā Ā Merchandise Imports (Ā£.o.b)
-16,092.50
Trade balance
Ā Ā -4,413.1
3.Ā Ā Ā Ā Ā Ā Services (net)
Ā Ā -2,346.84
Ā Receipts
Ā Ā Ā Ā 3,539.40
Ā Payments
Ā Ā Ā -5,886.24
4.Ā Ā Ā Ā Ā Ā Income (net)
Ā Ā Ā Ā Ā 4,155.98
Receipts
Ā Ā Ā Ā Ā Ā Ā -592.96
Ā Payments
Ā Ā Ā Ā Ā Ā Ā Ā Ā 202.24
5.Ā Ā Ā Ā Ā Ā Current Transfers (net)
Ā Ā Ā Ā Ā Ā Ā Ā Ā 795.20
Ā CAPITAL & FINANCIAL ACCOUNT
Ā
6.Ā Ā Ā Ā Ā Ā Capital Account
Ā Ā Ā Ā Ā Ā Ā Ā 1,127.78
Ā Capital Transfers
Ā Ā Ā Ā Ā Ā Ā Ā Ā 1,127.78
7.Ā Ā Ā Ā Ā Ā Financial Account
Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā
Direct Investments
Ā Ā Ā Ā Ā Ā Ā Ā Ā 3,355.68
Portfolio Investments
Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā -87.28
Other Investments
Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā 1,737.96
Ā Ā Ā Of which:
Ā
Ā Short term capital
Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā -164.12
Ā Other capital investments
Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā 2,172.40ā¦
Chapter 25 Solutions
MICROECONOMICS >C<
Ch. 25.1 - Prob. 1QQCh. 25.1 - Prob. 2QQCh. 25.1 - Prob. 3QQCh. 25.1 - Prob. 4QQCh. 25 - Prob. 1DQCh. 25 - Prob. 2DQCh. 25 - Prob. 3DQCh. 25 - Prob. 4DQCh. 25 - Prob. 5DQCh. 25 - Prob. 6DQ
Ch. 25 - Prob. 7DQCh. 25 - Prob. 8DQCh. 25 - Prob. 9DQCh. 25 - Prob. 10DQCh. 25 - Prob. 11DQCh. 25 - Prob. 1RQCh. 25 - Prob. 2RQCh. 25 - Prob. 3RQCh. 25 - Prob. 4RQCh. 25 - Prob. 5RQCh. 25 - Prob. 6RQCh. 25 - Prob. 7RQCh. 25 - Prob. 8RQCh. 25 - Prob. 9RQCh. 25 - Prob. 10RQCh. 25 - Prob. 1PCh. 25 - Prob. 2PCh. 25 - Prob. 3PCh. 25 - Prob. 4PCh. 25 - Prob. 5P
Knowledge Booster
Similar questions
- Suppose that currency market for Mexican pesos and Canadian dollars is initially in equilibrium, with 10 pesos trading for 1 Canadian dollar.Ā Because of a new trade agreement, there has been a shift in the demand for pesos due to a sudden increase in the capital inflow from Canada to Mexico. What is the effect of the capital inflow on the exchange rate of pesos for Canadian dollars?Ā Explain and show grahically.Ā On your graph, Quantity of Canadian dollars should be on the vertical axis and the Exchange rate (Mexican pesos per Canadian dollar should be on the vertical axis.arrow_forward6-Look at a countryās Terms of Trade (T.O.T.). It is assumed that when the T.O.T. value increases the countryās wellbeing goes up, and when the T.O.T. value declines, the countryās wellbeing is reduced. Do you agree??? Explain!!! Among others you stated: āTrade between countries highly depends upon terms of trade. T.O.T. has important effects on the balance of payments or on its economic growth so the T.O.T. is used to measure the wellbeing of the country.ā Further down thoughā¦you refute your previous statement by saying: āBut T.O.T. should not be used to calculate wellbeing as its calculation does not show the volume of export of the country, only shows relative changes between countriesā¦.āetc.arrow_forwardSuppose that Argentina's dollar-denominated external assets and liabilities are $10 billion and $100 billion, respectively, and its Argentine peso-denominated external assets are 70 billion pesos (P) and peso-denominated external liabilities are 50 billion pesos (P). Suppose further that Argentina fixes its exchange rate at P1.5 = $US1. Ā a) What is the peso value of Argentina's total external wealth? Is it a net debtor or creditor? Ā b) Suppose that Argentina changes its exchange rate to P2.3 = $US1. How does the external wealth of Argentina change when this occurs?arrow_forward
- 8. Suppose that last year, the nominal exchange rate between the Japanese yen and the British pound was Ā„150.0 per Ā£1.0, one unit of Japanese output cost Ā„1300, and one unit of British output cost Ā£8.0.a. What was the real exchange rate between the U.K. and Japan last year, expressed as the cost of British output (i.e. ā the quantity of Japanese output that exchanges for 1 unit of British output)? In which country were goods more expensive last year?arrow_forwardAssume the value of a country's currency is 1 when the price level is 1.2. Instructions: Enter your answers rounded to 2 decimal places. If you are entering any negative numbers be sure to include a negative sign (ā) in front of those numbers. If the price level changes to 1.4, by how much in percentage terms will the value of the country's currency change? percent Now assume that the value of the country's currency is equal to 1 when the price level is 2. If the price level changes to 0.8, by how much will the value of the country's currency change? percentarrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Brief Principles of Macroeconomics (MindTap Cours...EconomicsISBN:9781337091985Author:N. Gregory MankiwPublisher:Cengage Learning
Brief Principles of Macroeconomics (MindTap Cours...
Economics
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:Cengage Learning