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In 2020, the nation of Pecunia had a current account deficit of $900 million and a capital account balance of zero. Its net nonreserve financial assets fell by $600 million. What was the balance of payments of Pecunia in 2020? Is it a surplus or a deficit? Briefly interpret the balance. Assume that foreign central banks neither buy nor sell Pecunian assets. How did the Pecunian central bank's foreign reserves change in 2020? How would your answer to (b) change if you learned that foreign central banks had purchased $400 million of Pecunian assets in 2020?

In 2020, the nation of Pecunia had a current account deficit of $900 million and a capital account balance of zero. Its net nonreserve financial assets fell by $600 million. What was the balance of payments of Pecunia in 2020? Is it a surplus or a deficit? Briefly interpret the balance. Assume that foreign central banks neither buy nor sell Pecunian assets. How did the Pecunian central bank's foreign reserves change in 2020? How would your answer to (b) change if you learned that foreign central banks had purchased $400 million of Pecunian assets in 2020?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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In 2020, the nation of Pecunia had a current account deficit of $900 million and a capital account balance of zero. Its net nonreserve financial assets fell by $600 million. What was the balance of payments of Pecunia in 2020? Is it a surplus or a deficit? Briefly interpret the balance. Assume that foreign central banks neither buy nor sell Pecunian assets. How did the Pecunian central bank's foreign reserves change in 2020? How would your answer to (b) change if you learned that foreign central banks had purchased $400 million of Pecunian assets in 2020?
Transcribed Image Text:In 2020, the nation of Pecunia had a current account deficit of $900 million and a capital account balance of zero. Its net nonreserve financial assets fell by $600 million. What was the balance of payments of Pecunia in 2020? Is it a surplus or a deficit? Briefly interpret the balance. Assume that foreign central banks neither buy nor sell Pecunian assets. How did the Pecunian central bank's foreign reserves change in 2020? How would your answer to (b) change if you learned that foreign central banks had purchased $400 million of Pecunian assets in 2020?
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