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Practice Questions 1. What is meant by the balance of payments? 2. What economic transactions give rise to the receipt of Guyanese dollars from foreigners? What transactions give rise to payments to foreigners? 3. Why does the balance of payments statement balance?

Practice Questions 1. What is meant by the balance of payments? 2. What economic transactions give rise to the receipt of Guyanese dollars from foreigners? What transactions give rise to payments to foreigners? 3. Why does the balance of payments statement balance?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Practice Questions 1. What is meant by the balance of payments? 2. What economic transactions give rise to the receipt of Guyanese dollars from foreigners? What transactions give rise to payments to foreigners? 3. Why does the balance of payments statement balance? 4. From a functional viewpoint, a nation's balance of payments can be grouped into several categories. What are these categories? 5. What financial assets are characterized as official reserve assets for Guyana? 6. What are the meanings of a surplus (deficit) on the merchandise trade balance, goods and services balance, and current account balance? 7. Why has the goods and services balance sometimes shown a surplus while the merchandise trade balance shows a deficit? 8. What does the balance of international indebtedness measure? How does this statement differ from the balance of payments? 9. Indicate whether each of the following items represents a debit or credit on the U.S. balance of payments: a. A U.S. importer purchases a shipload of French Wine b. A Japanese automobile firm builds an assembly plant in Kentucky c. A British manufacturer exports machinery to Taiwan on a U.S. vessel d. A U.S. college student spends a year studying in Switzerland e. U.S. charities donate food to people in Africa f. Japanese investors collect interest income on their holdings of U.S. government securities g. A German resident sends money to her relatives in the U.S. h. Lloyds of London sells an insurance policy to a U.S. business firm i. A Swiss resident receives dividends on her IBM stock 10. Given the hypothetical items shown in the Table, determine the international position of the U.S. Is the U.S. a net creditor nation or a net debtor nation? Foreign official assets in the U.S. Other foreign assets in the U.S. U.S. government assets abroad U.S. private assets abroad International Investment Position of the United States (Billions of Dollars) 25 225 150 75
Transcribed Image Text:Practice Questions 1. What is meant by the balance of payments? 2. What economic transactions give rise to the receipt of Guyanese dollars from foreigners? What transactions give rise to payments to foreigners? 3. Why does the balance of payments statement balance? 4. From a functional viewpoint, a nation's balance of payments can be grouped into several categories. What are these categories? 5. What financial assets are characterized as official reserve assets for Guyana? 6. What are the meanings of a surplus (deficit) on the merchandise trade balance, goods and services balance, and current account balance? 7. Why has the goods and services balance sometimes shown a surplus while the merchandise trade balance shows a deficit? 8. What does the balance of international indebtedness measure? How does this statement differ from the balance of payments? 9. Indicate whether each of the following items represents a debit or credit on the U.S. balance of payments: a. A U.S. importer purchases a shipload of French Wine b. A Japanese automobile firm builds an assembly plant in Kentucky c. A British manufacturer exports machinery to Taiwan on a U.S. vessel d. A U.S. college student spends a year studying in Switzerland e. U.S. charities donate food to people in Africa f. Japanese investors collect interest income on their holdings of U.S. government securities g. A German resident sends money to her relatives in the U.S. h. Lloyds of London sells an insurance policy to a U.S. business firm i. A Swiss resident receives dividends on her IBM stock 10. Given the hypothetical items shown in the Table, determine the international position of the U.S. Is the U.S. a net creditor nation or a net debtor nation? Foreign official assets in the U.S. Other foreign assets in the U.S. U.S. government assets abroad U.S. private assets abroad International Investment Position of the United States (Billions of Dollars) 25 225 150 75
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