MGCR 382 Lecture 14: lec 14 ib

• School: McGill University
• Department: Management Core
• Course: MGCR 382
• Professor: Donald Melville

Document Summary

Ples of transactions that are counted in and captured in the u. s bop o a us based firm manages the construction of a major water treatment facility in a foreign country o the us subsidiary of a foreign firm pays profits (dividends) back to a parent in its home (foreign) country. Official reserves accounts: held by monetary authorities within a country o typically comprised of major currencies and reserve accounts held at the imf o the significance depends on whether the country is operating under a fixed exchange rate regime or a floating exchange rate system. Capital mobility: the degree to which capital moves freely cross border is critically important to a country"s bop, the free flow of capital can potentially destabilize an economy, bretton woods agreement promoted free movement of capital for current account transactions, a capital control is any restriction that limits or alters the rate or direction of capital movement into or out of a country.