The 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 (PP

The 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 (PP

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Open-economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 1QR

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Exports 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 financial account is Group of answer choices 454 447 -14 -447
10. Which of the following would cause a financial account (FA) surplus?a. the sale of heavy trucks used in construction by a domestic seller to a foreign buyer b. the purchase of stock in a U.S. corporation by a U.S. buyer c. the purchase of stock in a U.S. corporation by a foreign buyer d. the sale of stock in a U.S. corporation held by a foreign owner to a domestic buyer
Question 33 - Question 34: Suppose the balance of payments accounts for Home can be summarized by the following equations (assume there are no other international transactions): Exports of goods and services = 0.2YF-30EFC/DC Imports of goods and services = 0.15YH+20EFC/DC Purchases of domestic assets by foreigners = 250+ 1500(iH - İF) Purchases of foreign assets by domestic residents = 280-2000(İH-İF) Note: The subscripts "H" and "F" stand for Home and Foreign respectively. Also, interest rate is expressed in decimal points (i.e., if i = 0.05, then i = 5%). Question 33 Suppose the current level of output in Home is 6000, which are 750 units less than the level of output in Foreign. In addition, the interest rate at Home is equal to 4%, which is 1 percentage point higher than the interest rate in Foreign. Find the equilibrium level of exchange rate (rounded to 1 decimal point and be sure to show your work). Exchange rate: Question 34 Based on your answer in Question 33, determine…
2. You are given the following information about a country’s international transactions during a year: Item Value ($ millions) Exports 526 Imports 402 Net Income from Foreigners 3 Net Unilateral Transfers -8 Net Increase in the Country's Holding of Foreign Assets (excluding official reserves) 202 Net Increase in Foreign Holdings of the Country's Assets (excluding official reserves) 102 Net Statistical Discrepancy 4 a. Please calculate the country’s net exports. b. Please calculate the country’s current account balance. c. Please calculate the country’s official settlements balance. d. What is the value of the net change in official reserves assets? Is the country increasing or decreasing its net holdings of official reserve assets?
You are provided with the following information about a country's international transactions during a given year (in millions): Service exports $346 Service imports Merchandise exports Merchandise imports $354 $480 $348 Income flows, net Gifts to foreigners Increase in the country's holding of foreign assets, net (excluding official reserves assets) Increase in foreign holdings of the country's assets, net (excluding official reserves assets) Statistical discrepancy, net credit $153 $142 $352 $252 $154 Calculate the official settlements balance and the current account balance. Is the country increasing or decreasing its net holdings of official reserve assets? Why?
Respond succinctly and precisely to each of the following scenarios. Hint: these are beginning with a currency value change; start from there, and do not consider what caused the change. (h) The European Union and Brazil are trade partners. Brazil's currency, the real, appreciates relative to the European Union's euro. Ceteris paribus, how will this change affect: Brazil's net exports? Explain. the capital and financial account of Brazil?
Current Account Value Exports of goods 107,941 Exports of services 44,133 Primary income 36,063 receipts Imports of goods 132,484 Import of services 29,443 Primary income 29,750 payments Net unilateral -8,349 transfers Capital account -63 Net acquisition of 20,972 financial assets Net incurrence of liabilities 54,471 Financial derivatives Statistical discrepancy Based on the table above, the balance of goods is O -9,853 O-24,543 O 9,853 94:542 MacBook Air
Current Account Value Exports of goods 107,941 Exports of services 44,133 Primary income receipts 36,063 Imports of goods 132,484 Import of services 29,443 Primary income payments 29,750 Net unilateral transfers -8,349 Capital account -63 Net acquisition of financial assets 20,972 Net incurrence of liabilities 54,471 Financial derivatives 0 Statistical discrepancy Based on the table above, the balance of goods is
Current Account Value Exports of goods 107,941 Exports of services 44,133 Primary income receipts 36,063 Imports of goods 132,484 Import of services 29,443 Primary income payments 29,750 Net unilateral transfers -8,349 Capital account -63 Net acquisition of financial assets 20,972 Net incurrence of liabilities 54,471 Financial derivatives 0 Statistical discrepancy Based on the table above, this country is experiencing a balance on ____ of ____ Group of answer choices goods; 14,690 services; -14,690 goods and services; -9,853 goods and services; -11,890
Figure 1: US Saving, Investment, and Net Capital Outflow (NCO) 25.00% 20.00% 15.00% 10.00% 5.00% Investment 0.00% -5.00% -10.00% Saving Source: US. Department of Commerce. 1990 2005 2015 From the above graph, we can infer that since the 1980s, The US has been running a trade surplus and there has been a net capital outflow. The US has been running a trade surplus and there has been a net capital outflow. O The US has been running a trade deficit and there has been a net capital outflow. O The US has been running a trade deficit and there has been a net capital inflow. % of GDP 1960 1965 1970 1975 1980 1985 1995 2000 2010%
US Exports of Goods Imports of Goods Exports of Services Imports of Services Income earned from US owned assets abroad Billions USD 56 91 4 43 3 Income paid to foreign assets located in US Net Unilateral Transfers Refer to the above table. The goods and services balance = 38 -84
A country, Azania, has been experiencing instability in export and import flows and has its domestic budget tied to its export earnings. The following table reflects this export-import flows. To obtain full credit, you must show all steps. Px Pm Qx 96 94 100 92 95 196 a) Calculate Azania's net barter and income terms of trade for years 2012 and 2013. Year 2012 2013 b) Calculate the changes in net barter and incomes terms of trade for the years 2012 and 2013.