The following table shows the value of credits and debits in four balance-of-payments accounts in the fictional economy of Ghalha. Balance-of-Payments Account Debits (Billions of dollars) Credits (Billions of dollars) Merchandise Services 70 35 30 10 Income Receipts 30 30 Unilateral Transfers 55 30 Total 185 105 Based on the total values of Ghalha's debits and credits, there is Ghalha. This means that Ghalha has a deficit in the money flowing out of Ghalha to foreign countries than there is flowing into account. Complete the following table based on the credits and debits presented in the previous table. Term Balance of Trade Net Exports How to Calculate Size of Deficit or Surplus Deficit or Surplus (Billions of dollars)

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 £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?

Table 23.7 provides some hypothetical data on macroeconomic accounts for three countries represented by A. B, and C and measured in billions of currency units. In Table 23.7, private household saving is SH, tax revenue is T, government spending is G, and investment spending is Calculate the trade balance and the net inflow of foreign saving for each country. State whether each one has a trade surplus or deficit (or balanced trade). State whether each is a net lender or borrower internationally and explain.

State whether each of the following events Involves a financial flow to the U.S. economy or away from the U.S. economy: Export sales to Germany Returns paid on past U.S. financial investments In Brazil Foreign aid from the U.S. government to Egypt Imported oil from the Russian Federation Japanese investors buying U.S. real estate

How does the bottom portion of Figure 23.3, showing the international flow of investments and capital, differ from the upper portion?

Is a country for which imports and exports comprise a large fraction of the GDP more likely to adopt a flexible exchange rate or a fixed (hard peg) exchange rate?