For a given level of output (Yf), will the current account balance (CA) vary inversely with the level of domestic absorption (A)? Why or why not? Explain.
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For a given level of output (Yf), will the current account balance (CA) vary inversely with the level of domestic absorption (A)? Why or why not? Explain.
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- Explain why an increase in national saving (S) relative to investment (I) may lead to a current account surplus under flexible exchange rates.Find the current account balance when the trade balance are 2,81,000 and the invisible balance are 3,91,000 in the circular flow of income?How and why will switching from a flexible to fixed exchange rate regime affect exports as a percentage of GDP/ Exports-GDP-ratio
- The GDP for the United States is $18,036 billion and its current account balance is –$484 billion. What percent of GDP is the current account balance?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…A higher level of GDI relative to the country's absorption level contributes to a higher current account. True or False?
- Define the term balance of trade.Which 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 propertyHow does an increase in domestic income affect demand for imports how does a decrease in real exchange rate affect demand for imports
- If the trade deficit of the United States increases, how is the current account balance affected?What is the meaning of a surplus (deficit) on the current account balance? What economic transactions give rise to the receipt of dollars from foreigners? What transactions give rise to payments to foreigners?A country has been experiencing a persistent deficit in its current account balance due to high levels of imports compared to exports, along with significant outflows of income payments and transfers. To address this issue, the government is considering implementing a range of policies, including devaluation of the currency, imposition of tariffs, and promotion of export industries. The goal is to correct the balance of payments imbalance and improve the country's international financial position. The question is: In this scenario, the primary objective of the government's policies is to: A) Increase the country's reliance on imports B) Decrease foreign investment in the country C) Correct the balance of payments deficit D) Eliminate all forms of international trade