2. The Balance of Payments (BOP) measures all international transactions between two countries. The chart below shows six different transactions between the US and China United States China Purchased $800 of goods and services Sent $100 of humanitarian aid Chinese tourists spend $1000 in the US Purchased'$300 of goods and services Chinese purchased a $600 business in the US Chinese government purchased US. bonds Americans spent $200 in Chinese stock market American tourists spend $1000 in China Which country has a trade deficit and which has a trade surplus? Explain how you got your answer and calculate the value of each a. b. Assuming these are all the transactions between these two countries, calculate the value of the current accounts for each country. Explain why one will have a current account deficit and the other will have a current account surplus. c. Calculate the dollar value of US bonds held by the Chinese government. Explain how you determined your answer. Identify the relationship between financial inflows and outflows for each country- red to the US. In general, explain what

2. The Balance of Payments (BOP) measures all international transactions between two countries. The chart below shows six different transactions between the US and China United States China Purchased $800 of goods and services Sent $100 of humanitarian aid Chinese tourists spend $1000 in the US Purchased'$300 of goods and services Chinese purchased a $600 business in the US Chinese government purchased US. bonds Americans spent $200 in Chinese stock market American tourists spend $1000 in China Which country has a trade deficit and which has a trade surplus? Explain how you got your answer and calculate the value of each a. b. Assuming these are all the transactions between these two countries, calculate the value of the current accounts for each country. Explain why one will have a current account deficit and the other will have a current account surplus. c. Calculate the dollar value of US bonds held by the Chinese government. Explain how you determined your answer. Identify the relationship between financial inflows and outflows for each country- red to the US. In general, explain what

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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