ECN 301 Lecture 5: ECN301 Chapter 5

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chocolatebutterfly861

30 Nov 2016

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Chapter 5: saving and investment in the open economy. Any transaction tat involves a flow of funds into canada is a credit item (+) Any transaction that involves a flow of funds out of canada is a debit item (-) The current account: measures a country"s trade in currently produced goods and services, along with net transfers between countries. The components of the current account balance are: A car brought to canada from japan is a merchandise import for canada. It is a debit item for canada (-) It is a credit item for japan (+) Investment income is interest payments, dividends, and royalties a country"s residents receive from assets owned abroad. Nfp and net investment income from abroad are equivalent concepts. Payments from one country to another that do not correspond to the purchase of any good, service or asset. A monetary gift transfer by a canadian to a family member abroad is a debit item (-) for.

Related Questions

Balance of payments: Using the following data for a given year, calculate

Item	Value
The rise in the country's private financial assets abroad	623
Imports of merchandise	782
Investment income, net	-27
Transfers, net	-15
Export of services	504
Rise in foreign private financial assets in the country	580
Exports of merchandise	903
Rise in foreign governments financial assets in the country	224
Imports of services	735
Rise in-country government s financial assets abroad	29

(a) The current account balance.

(b) The financial account balance.

viridianmosquito185

1. Which of the following trading partners of the United States became its number one "trade problem" at the beginning of the 21^st century?

United Kingdom

Japan

Germany

Canada

China

2. Which of the following presents the correct picture of the outcome of increased world trade after the 1950s, contrary to Servan-Schreiber's prediction?

Third World countries have been excluded from this economic growth leading to stark imbalances in wealth.

The European Union has become the center of world trade, taking the position away from the United States.

The United States has continuously maintained the positive balance of trade it attained during the 1950s.

Economic power and potential has become more evenly distributed among the countries of the world.

SDRs and gold have lost their utility as the basic medium of financial exchange and most monetary statistics have started relating to the U.S. dollar.

3. The _____ of the balance-of-payments statement is most likely to record all merchandise exports, imports, and services plus unilateral transfers of funds.

current account

capital account

credit account

receivables account

reserves account

4. The Foreign Corrupt Practices Act (FCPA) was specifically addressed in the _____ section of the Omnibus Trade and Competitiveness act.

market access

export expansion

import relief

foreign exchange regulation

trade deficit

Exports of goods & services	$1000
Imports of goods & services	$800
The net change in assets owned abroad	$590
The net change in foreign-owned assets at home	$400
Unilateral transfers received	$100
Unilateral transfers paid	$200
Investment income paid to foreigners	$300
Investment income received from foreigners	$400
The balance on the capital account	$0

1. The balance on the current account is A) $100. B) $200. C) 0. D) - $100

2. The balance on the financial account is A) -$90. B) -$190. C) $100. D) $200

3. The statistical discrepancy is A) -$5. B) $5. C) $10. D) -$10

4. From the domestic economy's perspective,

A) there is a net international capital inflow equal to $190.

B) there is a net international capital outflow equal to $190.

C) the net international capital flow is zero.

D) its domestic absorption exceeds its GNP by $200.

orangewildebeest926

ECN 301 Lecture 5: ECN301 Chapter 5

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