ECON 1100 Chapter Notes - Chapter 14/15: Fiscal Policy, Hershey Bar, Aggregate Demand

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orchidtoad181

6 Apr 2017

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Countries are linked by trade in goods/services, flows of financial investment. Open economies: economy that has interactions in trade/financial with other countries. Balance of payments : record of a country"s trade with other countries. Part of the balance of payments that records country"s. Net exports, net income on investments, net transfers. Trade surplus: country exports more goods than imports. Net exports = balance of trade + balance of services. Balance of services: services exported - services imported. Can think of net exports being = to current account balance (because net income on investments and net transfers are very small) Records purchases of assets a country has made abroad and foreign purchases of assets in the country. Records long-term flows of funds into and out of a country. Capital outflow: from canada when investor in canada buys bond issued by foreign company. When canadian firm builds factory in another country. Foreign direct investment: firms build or buy facilities in foreign countries.

Related Questions

QUESTION 10

Below is a table for the Balance of Payments of Goegania, a prosperous island nation.

Current Account			Financial Account
Exports of Goods	$1,940		Capital Inflow	$661
Imports of Goods	???		Capital Outflow	$347
Trade Balance		???	Financial Account		???
Exports of Services	$569		Capital Account		$0
Imports of Services	???		Statistical Discrepancy		$0
Services Balance		$16	Balance of Payments		???
Income Received on Investments	$704
Income Paid on Investments	$505
Net Income on Investments		???
Net Transfers		$-168
The balance on the Current Account		???

Given this information, what is the value for the imports of goods?

Sometimes this question generates some weird numbers. Remember that you would always add the values in a category to get the total. So the total for the Financial Account is always Capital Inflow + Capital Outflow and the Trade Balance is always Exports + Imports for this table. It's just that sometimes those values being added are negative. If you get a negative answer, you should enter in the negative.

lavendertermite76

In 1995, the U.S. economy imported $750 billion in goods and exported $576 billion in goods. However, it exported $219 billion in services and imported $141 billion in services. Receipts of income from abroad were $211 billion while income payments going abroad were $191 billion. Unilateral transfers from the United States to other countries were $34 billion. Calculate the merchandise trade deficit for 1995. Calculate the current account balance for 1995. Also, explain how you decided whether payments on foreign investment and unilateral transfers counted on the positive or the negative side of the current account balance.

bronzetrout874

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

ECON 1100 Chapter Notes - Chapter 14/15: Fiscal Policy, Hershey Bar, Aggregate Demand

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