The following transactions (expressed in U.S. S billions) take place during a year. Assuming Capital account is zero. Based on it, Allocate each transaction to its account and Calculate the U.S. current-account, financial- account and the balance of payment. a. The United States exports $300 of goods and receives payment in the form of foreign demand deposits abroad. b. The United States imports $225 of goods and pays for them by drawing down its foreign demand deposits. c. The United States pays $15 to foreigners in dividends drawn on U.S. demand deposits here. d. American tourists spend $30 overseas using traveler's checks drawn on U.S. banks here. e. Americans buy foreign stocks with $60, using foreign demand deposits held abroad. f. The U.S. government sells $45 in gold for foreign demand deposits abroad. g. In a currency support operation, the U.S. government uses its foreign demand deposits to purchase $8 from private foreigners in the United States. U.S. balance of payments accounts: Exports Imports Balance on current account: Capital Inflows Capital Outflows Balance on financial account: There are no capital-account transactions.

The following transactions (expressed in U.S. S billions) take place during a year. Assuming Capital account is zero. Based on it, Allocate each transaction to its account and Calculate the U.S. current-account, financial- account and the balance of payment. a. The United States exports $300 of goods and receives payment in the form of foreign demand deposits abroad. b. The United States imports $225 of goods and pays for them by drawing down its foreign demand deposits. c. The United States pays $15 to foreigners in dividends drawn on U.S. demand deposits here. d. American tourists spend $30 overseas using traveler's checks drawn on U.S. banks here. e. Americans buy foreign stocks with $60, using foreign demand deposits held abroad. f. The U.S. government sells $45 in gold for foreign demand deposits abroad. g. In a currency support operation, the U.S. government uses its foreign demand deposits to purchase $8 from private foreigners in the United States. U.S. balance of payments accounts: Exports Imports Balance on current account: Capital Inflows Capital Outflows Balance on financial account: There are no capital-account transactions.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

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Question

The following transactions (expressed in U.S. $ billions) take place during a year. Assuming Capital account
is zero.
Based on it, Allocate each transaction to its account and Calculate the U.S. current-account, financial-
account and the balance of payment.
a. The United States exports $300 of goods and receives payment in the form of foreign demand deposits
abroad.
b. The United States imports $225 of goods and pays for them by drawing down its foreign demand
deposits.
c. The United States pays $15 to foreigners in dividends drawn on U.S. demand deposits here.
d. American tourists spend $30 overseas using traveler's checks drawn on U.S. banks here.
e. Americans buy foreign stocks with $60, using foreign demand deposits held abroad.
f. The U.S. government sells $45 in gold for foreign demand deposits abroad.
g. In a currency support operation, the U.S. government uses its foreign demand deposits to purchase
$8 from private foreigners in the United States.
U.S. balance of payments accounts:
Exports
Imports
Balance on current account:
Capital Inflows
Capital Outflows
Balance on financial account:
There are no capital-account transactions.

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