Business Administration 4440Q/R/S/T Study Guide - Special Drawing Rights, Canadian Dollar, Mercantilism
19 Apr 2014
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Answer: it is useful to examine a country"s bop for at least two reasons. First, the bop provides detailed information about the supply and demand of the country"s currency. Account, for example, show the composition of trade what a country imports and what it exports. Capital account shows inflows and outflows of capital in various categories. Bop data can shed light on important developments in a country"s comparative advantage and international competitiveness: the united states has run current account deficits continuously since the early 1980s. The current account deficits of us may be linked to factors such as the relative ease by which the united states could borrow abroad to finance current. Account deficits the high us rate of consumption (and correspondingly low savings rate) associated with large government deficits: us monetary policy that sustained relatively high us interest rates and a high value for the us dollar.
