Foundations of Economics, Student Value Edition (8th Edition)
8th Edition
ISBN: 9780134489230
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 34, Problem 1MCQ
To determine
The components of the current account balance.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
The current account balance consists of
A.the trade balance plus the services balance.
B.net exports of goods and services, minus net unilateral transfers.
C.net exports of goods and services, plus investment income from abroad, plus net unilateral transfers.
D.net exports of goods and services, plus investment income from abroad, plus net unilateral transfers, minus the capital and financial account balance.
The capital account balance is a nation's:
net investment income minus its net transfers
exports of goods and services minus its imports of goods and services
sale of real and financial assets to people living abroad minus its purchases of real and financial assets from foreigners
domestic investment spending minus domestic saving
What is paid to U.S. inputs (capital) in foreign countries minus what is paid to foreign inputs (capital) in the U.S. is known as,
transfer payments
the current account
net factor payments
net exports
Chapter 34 Solutions
Foundations of Economics, Student Value Edition (8th Edition)
Ch. 34 - Prob. 1SPPACh. 34 - Prob. 2SPPACh. 34 - Prob. 3SPPACh. 34 - Prob. 4SPPACh. 34 - Prob. 5SPPACh. 34 - Prob. 6SPPACh. 34 - Prob. 7SPPACh. 34 - Prob. 8SPPACh. 34 - Prob. 9SPPACh. 34 - Prob. 10SPPA
Ch. 34 - Prob. 1IAPACh. 34 - Prob. 2IAPACh. 34 - Prob. 3IAPACh. 34 - Prob. 4IAPACh. 34 - Prob. 5IAPACh. 34 - Prob. 6IAPACh. 34 - Prob. 7IAPACh. 34 - Prob. 8IAPACh. 34 - Prob. 1MCQCh. 34 - Prob. 2MCQCh. 34 - Prob. 3MCQCh. 34 - Prob. 4MCQCh. 34 - Prob. 5MCQCh. 34 - Prob. 6MCQCh. 34 - Prob. 7MCQCh. 34 - Prob. 8MCQ
Knowledge Booster
Similar questions
- Singapore and Japan are trading partners the Japanese economy is operating at full employment and Japans current account balance is zeroarrow_forwardThe Balance of Payments (BoP) has two main components, the Current Account; and Capital and Financial Account. Place possible sub-components of Current account or Capital and Financial account of the following: ▪ Trade balance (merchandise account) ▪ Non-financial services ▪ Foreign exchange reserves ▪ Other capital account (long term and short-term capital transfer) ▪ Investment income ▪ Unilateral transfers / unrequited transactions ▪ Central Bank Credit (CBC) ▪ Direct investment account ▪ Net errors and omissions ▪ Purchasing power parity (PPP)arrow_forwardInternational trade involves the sale of goods and services to residents in other countries (exports) and the purchase of goods and services from residents in other countries (imports). A country's balance-of-payments accounts keep track of the payments to, and receipts from, other countries for a particular time period. These include payments to foreigners for imports of goods and services, and receipts from foreigners for goods and services exported to them. Any transaction resulting in a payment to other countries is entered in the balance-of-payments accounts as a debit and given a negative (−) sign. Any transaction resulting in a receipt from other countries is entered as a credit and given a positive (+) sign. Balance-of-payments accounts are divided into the current account, the capital account, and the financial account. The current account records transactions that pertain to all three categories: (1) goods that refer to the import and export of physical goods, (2) services…arrow_forward
- In the balance of payments statement, a current account surplus will be matched by a capital and financial accounts deficit capital and financial accounts surplus trade deficit trade surplus A trade deficit means a net ? inflow of payments for goods and services outflow of goods and services inflow of goods and services excess of exports over importsarrow_forwardInternational Transaction Amount, Billions of $ Services imports -150 Merchandise exports 100 Unilateral transfers (net) -20 Merchandise imports -210 Services exports 200 Income receipts/payments (net) 65 The table above gives hypothetical figures for the U.S. balance of payments. The country’s current-account balance shows a Group of answer choices deficit of $20 billion surplus of $15 billion deficit of $15 billion surplus of $10 billionarrow_forwardThe capital account on the United States' balance of payments includes ALL BUT WHICH of the following transactions? a. Changes in ownership of foreign stocks. b. The sale of U.S. automobiles to German consumers. c. Foreign investors construct a factory on U.S. soil. d. The purchase of U.S. bones by a foreign government. e. A U.S. firm buys property in a foreign country.arrow_forward
- You have the following annual figures for the New Zealand economy. Investment expenditure $40.6 billion Net Exports $3.6 billion Net Foreign Income -$9.5 billion The current account balance is equal to $____billon (use 1 d.p. and a negative sign if the balance you have calculated is a deficit). New Zealand domestic savings is equal to $____billon (use 1 d.p.). Suppose that the government introduces a policy that bans foreign investment in New Zealand. If that happens then (everything else held constant) we would expect to see the current account balance -rise -remain the same. -fall -become harder to predict Suppose that along with the above policy, the government also wishes to see investment levels maintained. If that is to occur, what else must be happening in the economy? - The Government must raise taxes. - Firms must be offered incentives to invest. - New…arrow_forward1.1. Kenya has a comparative advantage over Uganda in the production of sugar if it: (1) Is able to produce sugar at a faster rate than Uganda. (2) Produces sugar at a lower opportunity cost than Uganda. (3) Has the absolute advantage in sugar production. (4) Specialises in sugar production. Q.1.2 An appreciation of the rand against the dollar:(1) Will worsen the current account balance but improve domestic prices. (2) Improve the current account balance but worsen domestic prices. (3) Improve the current account balance as well as reduce domestic prices. (4) Worsen both the balance on the current account as well as domestic prices. Q.1.3 Which of the following will NOT cause a depreciation of the rand against thedollar?(1) A decrease in imports from the United States. (2) A decrease in exports to the United States. (3) A decrease in the number of tourists visiting South Africa from the UnitedStates.(4) An increase in the number of American investors selling…arrow_forwardOn the basis of following information(All figures are in Rs), A. CURRNT ACCOUNT Exports= 150 Imports= 200 Services= 25 Income= ‐20 Transfer= 35 B. CAPITAL ACCOUNT External Assistance(net)= 100 External Commercial Borrowing(net)= 150 Short Term Credit= ‐5 Banking Capital(net)= 250 Foreign Investment(net)= 300 Other Flows(net)= 70 Find, Trade Balance Current Account Balance Capital Account Balancearrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you