If foreigners investing in the United States (.e. Di) exceeds U.S. investors investing abroad (.e. Fl). Othere is a financial account surplus the dollar is depreciating or not effected 00000 the dollar is appreciating the relative price of U.S. exports are increasing there is a financial account deficit.

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
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Chapter1: Making Economics Decisions
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If foreigners investing in the United States (i.e. DI) exceeds U.S. investors investing abroad (.e. Fl).
there is a financial account surplus
the dollar is depreciating or not effected
the dollar is appreciating
the relative price of U.S. exports are increasing
there is a financial account deficit.
The balance of payments theory includes:
The profit opportunity from arbitrage across international markets
The re-equilibration of the fx market due to supply and demand of FC and DC across the currency pair
Current account and financial account re-balancing due to relative prices
00
An expectation that the BOP stays in balance (0)
Cross account (FA to CA and vice versa) re-balancing due to arbitrage opportunities arising from changes in relative prices,
Transcribed Image Text:If foreigners investing in the United States (i.e. DI) exceeds U.S. investors investing abroad (.e. Fl). there is a financial account surplus the dollar is depreciating or not effected the dollar is appreciating the relative price of U.S. exports are increasing there is a financial account deficit. The balance of payments theory includes: The profit opportunity from arbitrage across international markets The re-equilibration of the fx market due to supply and demand of FC and DC across the currency pair Current account and financial account re-balancing due to relative prices 00 An expectation that the BOP stays in balance (0) Cross account (FA to CA and vice versa) re-balancing due to arbitrage opportunities arising from changes in relative prices,
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