EBK MACROECONOMICS
10th Edition
ISBN: 9780134896571
Author: CROUSHORE
Publisher: VST
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 1NP
To determine
Net Exports, current account balance, financial account balance, balance of payments
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
The table below gives the data about Etruria's balance of payments. (All figures are in billions of dollars.)
Foreign investment in Etruria
82
Secondary (transfers) income received from abroad
13
Primary (investment) income received from abroad
9
Imports of goods and services
148
Exports of goods and services
152
Secondary (transfers) income paid abroad
8
Etruria investment abroad
64
Primary (investment) income paid abroad
25
a. What is the value of the balance of trade?
$
b. What is the balance on the current account? Remember to enter a minus (−) sign to indicate negative values.
c. What is the balance on the capital account?
d. Is there a balance of payments surplus or deficit? How much?
Here are some balance of payments data (without pluses and minuses):
Category
Exports of goods
Imports of goods
Service exports
Service imports
Income receipts from abroad
Income payments to foreigners
Increase in home country's ownership of assets abroad
Increase in foreign ownership of assets in home country
Increase in home reserve assets
Increase in foreign reserve assets
Assuming that unilateral transfers equal zero, find each of the following.
Net exports (NX) = - 15
Current account balance (CA) = - 55
Financial account balance (KFA) :
=
Value
120
155
110
90
110
150
160
190
35
40
(Note: there is a statistical discrepancy, so do not use the current-account balance to determine the financial account balance. Also, the increase in home reserve assets is included in the
increase in the home country's ownership of assets abroad, and the increase in foreign reserve assets is included in the increase in foreign ownership of assets in the home country.)
The___________exchange rate between the currencies of two countries is the rate at which the currency of one country needs to be converted into that of a second country to ensure that a given amount of the first country's currency will purchase ______________quantity of goods and services in the second country as it does in the first. purchasing power-parity (PPP), the same purchasing power-parity (PPP), a larger market, the same market, a smaller
Knowledge Booster
Similar questions
- For the past year, a country has 200 million of exports of goods and services, 160 million of imports of goods and services, 60 million of income received from foreigners, and − 40 million of net unilateral transfers. What is the range of values for income paid to foreigners, so that each of the following would be true? a. The country has a current account surplus. b. The country has a deficit for its goods and services balance. c. The country is a net borrower from the rest of the world.arrow_forwardThe Table contains data for the U.S. balance of payments in prior year.All figures are in billions of dollars The data indicate that Americans A. purchased more assets abroad than foreigners bought in the U.S. B. purchased more services abroad than foreigners purchased from the U.S. C. purchased fewer assets abroad than foreginers bought in the U.S. D. have a trade surplus in goods and services Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardThe following information on Ghana’s Balance of Payments Accounts for 2013 (million U.S. Dollars) is provided. CURRENT ACCOUNT US$ 1. Merchandise Exports ( £.o.b) 11,679.40 2. Merchandise Imports (£.o.b) -16,092.50 Trade balance -4,413.1 3. Services (net) -2,346.84 Receipts 3,539.40 Payments -5,886.24 4. Income (net) 4,155.98 Receipts -592.96 Payments 202.24 5. Current Transfers (net) 795.20 CAPITAL & FINANCIAL ACCOUNT 6. Capital Account 1,127.78 Capital Transfers 1,127.78 7. Financial Account Direct Investments 3,355.68 Portfolio Investments -87.28 Other Investments 1,737.96 Of which: Short term capital -164.12 Other capital investments 2,172.40…arrow_forward
- The following information on Ghana’s Balance of Payments Accounts for 2013 (million U.S. Dollars) is provided. CURRENT ACCOUNT US$ 1. Merchandise Exports ( £.o.b) 11,679.40 2. Merchandise Imports (£.o.b) -16,092.50 Trade balance -4,413.1 3. Services (net) -2,346.84 Receipts 3,539.40 Payments -5,886.24 4. Income (net) 4,155.98 Receipts -592.96 Payments 202.24 5. Current Transfers (net) 795.20 CAPITAL & FINANCIAL ACCOUNT 6. Capital Account 1,127.78 Capital Transfers 1,127.78 7. Financial Account Direct Investments 3,355.68 Portfolio Investments -87.28 Other Investments 1,737.96 Of which: Short term capital -164.12 Other capital investments 2,172.40…arrow_forwardExports of goods and services 1,872 Imports of goods and services 2,375 Net unilateral transfers -99 Net Investment Income 170 Capital Account -7 Net US acquisition of financial assets 958 Net US incurrence of liabilities 1,391 Net financial derivatives -14 Based on the table above, the balance on the current account is Group of answer choices 673 503 -432 -447 -503arrow_forwardWhat do the plus signs and negative signs signify in the U.S. balance-of-payments statement? Which of the following items appear in the current account and which appear in the capital and financial account? U.S. purchases of assets abroad; U.S. services imports; foreign purchases of assets in the United States; U.S. goods exports; U.S. net investment income. Why must the current account and the capital and financial account sum to zero?arrow_forward
- Question 2 Table 1 represents the components of the UAE current account balance during 2019-2020. Table 1 Current Account Balance in Billion Dirhams 2019 2020 Exports: Goods 1152.4 1003.0 228.2 Services Total Exports Imports: Goods 331.5 856.9 774.1 Services 323.9 218.6 Total Imports Net Exports Net transfers + investment income net Investment income Net 7.6 -1.7 Net transfers Total Transfers Current account Balance Source Central Bank of UAE -173.6 -159.7 1. Complete table 1 2. Interpret your results.arrow_forwardThe following transactions (expressed in U.S. $ billions) take place during a year. Assuming Capital account is zero. Based on it, Allocate each transaction to its account and Calculate the U.S. current-account, financial- account and the balance of payment. a. The United States exports $300 of goods and receives payment in the form of foreign demand deposits abroad. b. The United States imports $225 of goods and pays for them by drawing down its foreign demand deposits. c. The United States pays $15 to foreigners in dividends drawn on U.S. demand deposits here. d. American tourists spend $30 overseas using traveler's checks drawn on U.S. banks here. e. Americans buy foreign stocks with $60, using foreign demand deposits held abroad. f. The U.S. government sells $45 in gold for foreign demand deposits abroad. g. In a currency support operation, the U.S. government uses its foreign demand deposits to purchase $8 from private foreigners in the United States. U.S. balance of payments…arrow_forwardGiven the following information: Unilateral transfers: $120 billion, Exports in goods: $1,000 billion, Exports in services: $500 billion, Imports in goods: $1,400 billion, Imports in services: $300 billion, Income received by U.S. investors on foreign stocks and bonds: $600 billion, Income received by foreign investors on U.S. assets: $500 billion, what is the current account balance?arrow_forward
- US Exports of Goods Imports of Goods Exports of Services Imports of Services Billions USD 22 6 34 21 22 14 -29 Income earned from US owned assets abroad Income paid to foreign assets located in US Net Unilateral Transfers Refer to the above table. With no statistical discrepancy, the capital and financial account balancearrow_forwardWhich of the following is included in a nation's current account? a) Purchases of foreign assets b) Borrowings from abroad c) Foreign purchases of U.S. financial assets d) Investment income receipts e) Purchases of foreign real propertyarrow_forward19. In balance-of-payments accounting, the sale of a foreign production facility by a SA firm is a __________item in the SA balance of payments; the deposit of funds in a foreign bank account by a SA citizen__________ item in the SA balance of payments. A Debit; also is a debitB Debit; is a creditC Credit; is a debitD Credit; also is a creditarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning