An external balance surplus will cause.floating exchange rate regime.in a fixed exchange rate regime andin agovernment intervention to raise the value of the currency; the currency to depreciategovernment intervention to lower the value of the currency; the currency to depreciategovernment intervention to raise the value of the currency; the currency to appreciategovernment intervention to lower the value of the currency: the currency to apprecate

Related Theory:-External Balance Surplus and Exchange Rate RegimesIn a scenario where a country…

Answered: An external balance surplus will cause.…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter34: International Finance

Section34.3: Fixed Exchange Rates

Problem 2ST

See similar textbooks

Similar questions

State whether each of the following events Involves a financial flow to the Mexican economy or a financial flow out of the Mexican economy: Mexico Imports sen4ces from Japan Mexico exports goods to Canada U.S. investors receive a return from past financial investments in Mexico
If the trade deficit of the United States increases, how is the current account balance affected?
Many think that the size of a trade deficit is due to a lack of competitiveness of domestic sectors, such as autos. Explain why this is not true.
Occasionally, a government official will argue that a country should strive for both a trade surplus and a healthy inflow of capital from abroad. Is this possible?
If foreign investors buy more U.S. stocks and bonds, how would that show up in the current account balance?
Explain briefly whether each of the following would be more likely to lead to a higher level of trade for an economy, or a greater imbalance of trade for an economy. Living In an especially large country Having a domestic investment rate much higher than the domestic savings rate Having many other large economies geographically nearby Having an especially large budget deficit Having countries with a tradition of strong protectionist legislation shutting out imports
In 2001, the United Kingdoms economy exported goods worth 192 billion and services worth another 77 billion. It imported goods worth 225 billion and services worth Â£66 billion. Receipts of income from abroad were 140 billion while income payments going abroad were 131 billion. Government transfers from the United Kingdom to the rest of the world were 23 billion, while various U.K government agencies received payments of 16 billion from the rest of the world. Calculate the U.K. merchandise trade deficit for 2001. Calculate the current account balance for 2001. Explain how you decided whether payments on foreign investment and government transfers counted on the positive or the negative side of the current account balance for the United Kingdom in 2001.
If countries reduced trade barriers, would the international flows of money increase?
Imagine that the economy of Germany finds itself in the following situation: the government budget has a surplus of 1 of Germanys GDP; private savings is 20 of GDP; and physical investment is 18 of GDP. Based on the national saving and investment identity, what is the current account balance? If the government budget surplus falls to zero, how will this affect the current account balance?
Will nations that are more involved in foreign trade tend to have higher trade imbalances, lower trade imbalances, or is the pattern unpredictable?
In recent decades, has the U.S. trade balance usually been in deficit, surplus, or balanced?
Some economists warn that the persistent trade deficits and a negative current account balance that the United States has run will be a problem in the long run. Do you agree or not? Explain your answer.

SEE MORE QUESTIONS

Recommended textbooks for you

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Macroeconomics

Economics

ISBN:

9781337617390

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Microeconomics

Economics

ISBN:

9781337617406

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Macroeconomics

Economics

ISBN:

9781337617390

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Microeconomics

Economics

ISBN:

9781337617406

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Principles of Economics 2e

Economics

ISBN:

9781947172364

Author:

Steven A. Greenlaw; David Shapiro

Publisher:

OpenStax

MACROECONOMICS

Economics

ISBN:

9781337794985

Author:

Baumol

Publisher:

CENGAGE L

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

SEE MORE TEXTBOOKS