Assume the following to be a portion of the simplified balance of payments statement for a hypothetical country. The values are given in billions of dollars. Exports Imports $1,000 - $750 Capital Outflows - $250 $150 Capital Inflows If the central bank has not changed its holding of foreign-currency reserves during this period, then the capital-service account for this country should be equal to $ billion.

For each of the following, identify in which part ofthe balance-of-payments account the transaction isrecorded (current account, capital account, or netchange in international reserves) and whether it is areceipt or a payment.a. A British subject’s purchase of a share of Johnson &Johnson stockb. An American citizen’s purchase of an airline ticketfrom Air Francec. The Swiss government’s purchase of U.S. Treasury billsd. A Japanese citizen’s purchase of California orangese. $50 million of foreign aid to Hondurasf. A loan from an American bank to Mexicog. An American bank’s borrowing of eurodollars

Why would a nation “dollarize”—that is, adoptanother country’s currency instead of having its own?

Q.1.10 Which of the following statements is correct? (2)(1) When a British firm invests in a bicycle manufacturing facility in South Africa,the amount concerned is entered as an inflow on the current account of theSouth African balance of payments.(2) When someone purchases a second‐hand car, the transaction is included inthe calculation of GDP in the year the sale took place.(3) A deficit on the current account of the balance of payments indicates thatthe country exported more than it imported during the period in question.(4) In the base year, the value of nominal GDP is equal to the value of real GDP.

The demand for Australian dollars in the foreign exchange market equals 14000 – 3000e and thesupply of Australian dollars in the foreign exchange market equals 2000 + 2000e, where e is thenominal exchange rate expressed in euros per Australian dollar. If the Australian dollar is fixed at 2euros per Australian dollar, then to maintain this fixed rate, what is the required change in theReserve Bank of Australia’s holdings of euros? 1increase by 4000 euros 2decrease by 2000 euros 3decrease by 4000 euros 4increase by 2000 euros

What would make a country decide to changefrom a common currency, like the euro, back to its own currency?

How should appreciation of a firm’s home country currency generally affect its cash inflows? How should depreciation of a firm’s home country currency generally affect its cash outflows?

Which of the following scenarios is most likely to lead to a country experiencing a contractionary devaluation? a. Havingassetsandliabilitiesbothpredominantly denominated in the domestic currency b. Havingassetspredominantlydenominatedinthe domestic currency and liabilities in a foreign currency c. Having assets predominantly denominated in a foreign currency and liabilities in the domestic currency d. Havingassetsandliabilitiesbothpredominantly denominated in a foreign currency.

Assurme the following to be a portion of the sirmplified balance of payments statement for a hypothetical country. The values are given in billions of dollars. Exports s00 Imports Capital Outflows Capital Inflows - S600 - S200 $120 If the central bank has not changed its holding of foreign-currency reserves during this period, then the capital-service account for this country should I equal to S billion.

An American buys a Japanese car, paying by writing a check on an account with a bank in New York. How would this be accounted for in the balance of payments? Lütfen birini seçin: O A. financial account as a U.S. asset import and a capital account, US transfer payment O B. financial account as a U.S. asset export and a financial account, a US asset import O C.a current account as a U.S. good import and a financial account, a U.S. asset import O D. a current account as a US good export and a financial account, a U.S. asset export O E. a current account as a U.S. good import and a financial account, a U.S. asset export