A balance of payments deficit is defined as the amount by which a. quantity supplied of a country’s currency exceeds quantity demanded. b. a currency must appreciate in order to reach equilibrium. c. a country’s exports exceed its imports. d. quantity demanded of a country’s currency exceeds quantity supplied.

A balance of payments deficit is defined as the amount by which a. quantity supplied of a country’s currency exceeds quantity demanded. b. a currency must appreciate in order to reach equilibrium. c. a country’s exports exceed its imports. d. quantity demanded of a country’s currency exceeds quantity supplied.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A nation’s merchandise trade balance reflects _____. A.the value of exports of servicestrade b. in tangibles and intangibles c.the same information as its balance of payments d.trade in tangible products e.the value of imports of services
Fixed exchange rate: -Monetary policy of particular national economy could be more imposed. -Speculative actions could be reduced and discouraged. -Foreign could be easily monitored and effects if foreign trade could be minimized. -Reduction of inflation pressures. -Currency could be overpriced or underpriced which could harm the economy. Floating exchange rates: -Allows for the an economy to have a more driven monetary policy. -Trade deficit could be easily treated. -Foreign exchange reserves would not be required. Most countries might start with floating exchange rates thanks to the disadvantages with fixed exchange rates. In order to select the right one, there needs to be a future plan, goals, and demands. For example, a stronger foreign exchange rate would be preferred if a country is trying to attract foreign investments. The decision about the type of exchange rate system all depends upon the time frame for situations. Frequent changes in international markets could create…
Question 4 All other things being equal, which of the following is most likely to lead to improvement in the balance of payments deficit of a country? A fall in an ABCD income tax rates. unemployment. the exchange rate. exports.
If other things are held constant, an increase in Kazakhstan's export will a. Tend to cause tenge to depreciate because the supply of tenge will decline b. Tend to cause tenge to depreciate because the supply of tenge will rise C. Have no effect on tenge value d. Tend to cause tenge to appreciate because the demand for tenge will rise e. Tend to cause tenge to appreciate because the supply of tenge will rise
An economy can run a trade deficit (have negative exports) permanently if: a. The Current and Financial account generate a net outflow of money, and the external debt does not increase as percentage of GDP. b. The level of GDP of the country is sufficiently low. c. Migration of the national labour force to overseas is allowed. d. The Current and Financial account bring enough net inflow of money, and the external debt does not increase as percentage of GDP.
9. A deficit in the financial account means that the nation has:a. imported more assets than it has exported. b. exported more assets than it has imported. c. saved more than it has invested. d. produced more than it has consumed.
A net exports deficit will become a surplus if _______. A. the country appreciates its currency B. the government budget deficit is turned into a surplus and the private sector has a surplus C. private saving and government saving exceed private investment D. the private sector surplus adjusts to equal the government sector deficit
Current Account does not include: Question 6Answer a. Payments in connection with foreign trade b. Portfolio investment c. Net income investments in other country d. Interest on loans to other countries
If U.S. securities pay 6 percent interest, and if Great Britain’s securities pay 8 percent interest, then a. pounds depreciate relative to dollars. b. pounds appreciate relative to dollars. c. Great Britain’s imports will fall. d. Great Britain’s exports will rise.
1. There are several reasons Purchasing Power Parity may not hold in reality. Among those reasons are: (Mark ALL that apply) A. The exact quality of goods varies between countries B. Some goods are not tradeable. C. Some countries have tariffs or other trade barriers. D. People's tastes vary between countries.
II. Trade Accounts. A. The Balance on Goods and Services has been in deficit for years. Assume the U.S. has $400 of goods and services exports. Use a simple flow of trade diagram to illustrate a U.S. Balance on Goods and Services deficit of $50. Foreign. U.S. B. I have argued that the illustration above is incomplete because it requires foreigners to hold American dollars for years and years. This seems unlikely. Use another flow of trade diagram to show how a deficit in the Balance of Goods and Services can be offset somewhere else in the trade accounts. U.S. Foreign. C. A Canadian furniture maker with plants in Canada and the United States, sells $100,000 worth of furniture made in Canada to Americans. They use the money from the sale to purchase $100,000 worth of furniture quality lumber from American suppliers to be used in their Canadian plant. How do these two transactions affect the Balance on Goods and Services? Give a number D. A Canadian furniture maker with plants in…
Economics Consider two economies, one called the domestic country and the other the foreign country. Given the transactions listed in (a) through (i), construct the balance of payments for domestic country. If necessary, include a statistical discrepancy. (Hint: Think about the cash flow.) a. The domestic country purchased $120 in oil from the foreign country. b. The domestic sells $35 of ski slopes to foreign country.c. Foreign consumers purchased $50 of wine from the domestic wineries. d. Domestic investors were paid $25 in dividends from holdings of foreign equities. Hint: this is (investment) income received by domestic country. e. Foreign investors were paid $20 in dividends from their holdings of domestic equities. f. Domestic residents gave $15 to foreign charities.g. Domestic businesses borrowed $60 from foreign banks.h. Foreign investors purchased $15 of domestic government bonds. i. Domestic investors purchased $50 of foreign government bonds. Pls solve