You are provided with the following information about a country'sinternational transactions during a given year (in millions):Service exports$346Service importsMerchandise exportsMerchandise imports$354$480$348Income flows, netGifts to foreignersIncrease in the country's holding of foreign assets, net(excluding official reserves assets)Increase in foreign holdings of the country's assets, net(excluding official reserves assets)Statistical discrepancy, net credit$153$142$352$252$154Calculate the official settlements balance and the current account balance.Is the country increasing or decreasing its net holdings of official reserve assets?Why?

International transactions: International dealing could be a cash transfer (often as a part of a…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Interest received from U.S. holdings of foreign assets and interest paid to foreigners for U.S. investment assets is recorded in the A) B) C) D) E) capital account. official settlements account. current account. official dollar account, official reserves account.
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11. Pricing foreign goods The nominal exchange rate is the price of one currency in terms of another currency. A nominal exchange rate specifies how many units of one country's currency are needed to buy one unit of another country's currency. Suppose the following table forecasts nominal exchange rate data for February 1, 2019, in terms of Canadian dollars per unit of foreign currency. Use the information in the table to answer the questions that follow. Foreign Currency United States dollar (USD). euro (EUR) Japanese yen (JPY) Mexican peso (MXN) United Kingdom pound (GBP) Cost of One Unit of Foreign Currency (Dollars) 1.31 1.50 0.012 0.068 1.72 Source: "Bank of Canada," https://www.bankofcanada.ca/rates/exchange/daily-exchange-rates/. Suppose that on February 1, 2019, a marble statue handmade in Mexico is priced at 20,000 MXN. The approximate Canadian dollar price of the statue would be
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Based on the table provided, answer the following questions: Compute the U.S. dollar–yen exchange rate E$/¥ and the U.S. dollar–Canadian dollar exchange rate E$/C$ on January 20, 2016, and January 20, 2015. What happened to the value of the U.S. dollar relative to the Japanese yen and Canadian dollar between January 20, 2015, and January 20, 2016? Compute the percentage change in the value of the U.S. dollar relative to each currency using the U.S. dollar–foreign currency exchange rates you computed in (a). Using the information in the table for January 20, 2016, compute the Danish krone–Canadian dollar exchange rate Ekrone/C$.

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