Which of the following would increase the current account balance of the United States? O an increase in the amount of money the U.S. government sends in foreign aid to other countries O an increase in imports an increase in the amount of income U.S. companies pay out to foreigners who own investments in the United States. an increase in net exports
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- What problem is most directly associated with a trade deficit? O fixed exchange rates O devaluation of a nation's currency O unemployment in import industries. O inflationDetermine which 'account of the Balance-of-Payments is affected the following transaction: A local parent sends 500 Euros to his/her son who is studying engineering at a German university. Select one: O a. Capital Account Foreign Direct Investment O b. Capital Account - Portfolio Investment Current Account - Transfers Od. Current Account - Imports O e. Current Account ExportsDetermine which account of the Balance-of-Payments is affected the following transaction: A local parent sends 500 Euros to his/her son who is studying engineering at a German university. Select one: O a. Capital Account Foreign Direct Investment O b. Current Account Transfers O c. Capital Account Portfolio Investment O d. Current Account Imports O e. Current Account - Exports re to search
- Suppose the United States decides to subsidize theexport of U.S. agricultural products, but it does notincrease taxes or decrease any other governmentspending to offset this expenditure. Using a threepanel diagram, show what happens to nationalsaving, domestic investment, net capital outflow, theinterest rate, the exchange rate, and the trade balance.Also explain in words how this U.S. policy affects theamount of imports, exports, and net exports.2 3. 4 O The balance of trade equals exports minus imports. O Since the inception of NAFTA, U.S. exports to Mexico have grown from $50 billion to $221 billion, while imports from Mexico have risen from $49 billion to $270 billion. During that same period, U.S. exports to Canada have grown from $114 billion to $287 billion, while imports from Canada have risen from $128 billion to $317 billion. Select two trends from the list below that have resulted from the NAFTA agreements: a. Canada's balance of trade with the U.S. has increased. b. Mexico's balance trade with the US has decreased. c. Mexico's balance of trade with the U.S. has increased. d. Net trade between United States and Canada has not changed. e. Net trade between United States and Mexico has not changed. Canada's balance f trade with the US has decreasedConsider the balance-of-payments accounting information for Lalaland in 2010 as shown in the table below. All values are in billions of dollars and any variables not provided below have a value of zero. Exports 560 Imports Net foreign-investment income Capital outflows Capital inflows 350 - 50 255 95 What is the current account balance for Lalaland in 2010? ..... O A. $160 billion O B. $260 billion OC. - $260 billion O D. - $160 billion O E. $0
- Mexican imports of U.S. goods, this would O Create a supply of pesos O Create a supply of dollars Reduce the demand for dollars O Have no effect on the peso-dollar exchange rateEvaluate the following statement: "if lower exchange rates increase a nation's exports, the govermment should do everything in its power to anure that the exchange rate for its cumency is an low as it can possbly be This statement does nat acknowledge that lower exchange rates OA couid result in a reluctance from other countries to accept this nation's currency for payment of any goodn or services OB. could make a currency virtually worthless. O C. make a nation's imports more expensive. COD. None of the above responses are acknowledged by the statement.A balance of payments is O the arbitrage potential caused by difference in real prices of goods in different countries. O a register of all trade between two nations. O a record of all payments between one nation and the rest of the world. O the account of all payments for goods and services from one nation to another. O the difference in exchange rates between two currencies.
- When Sean visited his grandparents in Edinburgh, Scotland, over the summer, he noticed that things he would normally buy at home in Alabama were much more expensive there. One morning, he used his credit card to purchase Starbucks coffee, which would normally cost $4 at home, but it showed on his credit card as $6.25 when converted back to U.S. dollars. Sean is experiencing a difference in the between the United States and Scotland.Table 23.7 provides some hypothetical data on macroeconomic accounts for three countries represented by A. B, and C and measured in billions of currency units. In Table 23.7, private household saving is SH, tax revenue is T, government spending is G, and investment spending is Calculate the trade balance and the net inflow of foreign saving for each country. State whether each one has a trade surplus or deficit (or balanced trade). State whether each is a net lender or borrower internationally and explain.If foreign investors buy more U.S. stocks and bonds, how would that show up in the current account balance?