6. Debtors and creditors - Net international investment position Suppose that at the end of 2017, the value of U.S.-owned assets abroad is $16,682 billion, and the value of foreign-owned assets in the United States (which are U.S. liabilities) is $17,292 billion. The net international investment position the United States in 2017 is $ experiencing debt.) billion. (Hint: Be sure to include a negative sign if the U.S. is Suppose that in 2018, the United States runs a current account deficit of $428 billion. If other factors remained constant, the net international investment position of the United States would during 2018 to billion. Suppose that during 2018, the U.S. net external debt increases by $357 billion from the previous year. Given the current account balance, which of the following can explain this outcome? Check all that apply. Foreign-owned assets in the United States depreciated (lost value). The net borrowing of the United States was greater than its current account deficit. The U.S. current account deficit was greater than the country's net borrowing. U.S.-owned assets held abroad appreciated (gained value).

6. Debtors and creditors - Net international investment position Suppose that at the end of 2017, the value of U.S.-owned assets abroad is $16,682 billion, and the value of foreign-owned assets in the United States (which are U.S. liabilities) is $17,292 billion. The net international investment position the United States in 2017 is $ experiencing debt.) billion. (Hint: Be sure to include a negative sign if the U.S. is Suppose that in 2018, the United States runs a current account deficit of $428 billion. If other factors remained constant, the net international investment position of the United States would during 2018 to billion. Suppose that during 2018, the U.S. net external debt increases by $357 billion from the previous year. Given the current account balance, which of the following can explain this outcome? Check all that apply. Foreign-owned assets in the United States depreciated (lost value). The net borrowing of the United States was greater than its current account deficit. The U.S. current account deficit was greater than the country's net borrowing. U.S.-owned assets held abroad appreciated (gained value).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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13. Study Questions #13. Ch 11. Suppose the interest rate (on an annual basis) on three-month Treasury bills is 10% in London and 6% in New York, and the spot rate of the pound is $2.03. How can a U.S. investor profit from uncovered interest arbitrage? O Purchase pounds at $2.03 in New York to buy U.K. Treasury bills in London, thus earning 4% per year. O Purchase pounds at $2.03 in New York to buy U.K. Treasury bills in London, thus earning 3% per year. O Purchase pounds at $2.03 in New York and sell them in the U.K., thus earning 4%. O Purchase pounds at $2.03 in New York to buy U.K. Treasury bills in London, thus earning 3.05% per year.
Consider a hypothetical open economy. The following table presents data on the relationship between various real interest rates and national saving, domestic investment, and net capital outflow in this economy, where the currency is the U.S. dollar. Assume that the economy is currently experiencing a balanced government budget. Real Interest Rate National Saving Domestic Investment Net Capital Outflow (Percent) (Billions of dollars) (Billions of dollars) (Billions of dollars) 7 60 25 -10 6 55 30 -5 5 50 35 0 4 45 40 5 3 40 45 10 2 35 50 15 Given the information in the preceding table, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange points (square symbol) to plot the supply of loanable funds. Finally, use the black point (cross symbol) to indicate the equilibrium in this market. On the following graph, plot the relationship between the real…
6. Debtors and creditors - Net international investment position Suppose that at the end of 2014, the value of U.S.-owned assets abroad is $15,888 billion, and the value of foreign-owned assets in the United States (which are U.S. liabilities) is $16,953 billion. The net international investment position of the United States in 2014 is $ experiencing debt.) billion. (Hint: Be sure to include a negative sign if the U.S. is Suppose that in 2015, the United States runs a current account surplus of $514 billion. If other factors remained constant, the net international investment position of the United States would during 2015 to $ billion. Suppose that during 2015, the U.S. net external debt decreases by $393 billion from the previous year. Given the current account balance, which of the following can explain this outcome? Check all that apply. U.S.-owned assets held abroad depreciated (lost value). The U.S. current account deficit was greater than the country's net borrowing.…
9. Consider savings-investment diagrams assuming that there are two countries in the world, A and B. Initially, both countries are identical, i.e., they have the same supply of savings and demand for investment. Therefore, even as open economies, they both have balanced current accounts, i.e., neither has a deficit or surplus. Now assume that in country A, the government increases the budget deficit, shifting the supply of savings to the left. If all other curves (A s investment demand, B s savings supply, B s investment demand) stay the same, what will the effect of the increase in A's budget deficit? a. Country B will have a CA surplus. b. Country A will have a KFA deficit. c. Investment in country B will increase. d. The world real interest rate will fall.
Effects of a government budget deficit Consider a hypothetical open economy. The following table presents data on the relationship between various real interest rates and national saving, domestic investment, and net capital outflow in this economy, where the currency is the U.S. dollar. Assume that the economy is currently experiencing a balanced government budget. Real Interest Rate National Saving Domestic Investment Net Capital Outflow (Percent) (Billions of dollars) (Billions of dollars) (Billions of dollars) 7 55 25 -10 6 50 35 -5 5 45 45 0 4 40 55 5 3 35 65 10 2 30 75 15 Given the information in the preceding table, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange points (square symbol) to plot the supply of loanable funds. Finally, use the black point (cross symbol) to indicate the equilibrium in this market.
Please help me with 6 and 8. Thank you
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
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4. Short Answer Questions: If the price level in Japan is 1.0, the price level in the U.S. is 2.0, and it costs 100 yen to buy one dollar, then the nominal exchange rate is exchange rate between the U.S. and Japan is goods. _dollar / yen, the real Japanese goods per US 5. In order for an individual to be indifferent between holding foreign or domestic bonds, A. the Marshall-Lerner condition must hold. B. the foreign and domestic interest rates must be equal. C. the expected rate of depreciation of the domestic currency is zero. D. the interest parity condition must hold. 6. Assume that the interest parity condition holds. Also assume that the U.S. interest rate is 8% while the U.K. interest rate is 6%. Given this information, financial markets expect the pound to _(appreciate / depreciate) by %.