ECON 1010 Chapter Notes - Chapter 26: Loanable Funds, Real Interest Rate, Aggregate Demand

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1 Sep 2016

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Econ 1010 lecture #7 chapter 25 cont Response: we record international transactions in the balance of payments accounts. A country"s balance of payments accounts records its international trading, borrowing and lending. There are three balance of payments accounts: current account. This records receipts from exports of goods and services sold abroad. The payments for imports of goods and services from abroad. The net transfers (such as foreign aid payments) The current account balance = exports imports + net interest income + net transfers. This records foreign investment in canada minus the canadian investment abroad: official settlements account. This records the change in the canadian official reserves. The sum of the balances of the 3 accounts always be zero. If canadian official reserves increase, the official settlements account is negative. It is a country that is borrowing more from the rest of the world than it is lending to it is called a net borrower.

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Billions of dollars:

Exports of goods and services: 635

Imports of goods and services: -555

Net interest income: -18

Net transfers: 22

Urland's investment abroad: -467

Foreign investment in Urland: 321

The above figures show some of the balance of payments accounts for Urland. What is Urland's balance in the official settlements account?

ochrehound971

The following table lists balance of payment current accounts for Country A.

Current Accounts
1.	Exports of goods, services, and income		$169,928
2.	Goods, adjusted, excluding military	$94,068
3.	Services	46,889
4.	Income receipts on U.S. assets abroad	31,921
5.	Imports of goods, services, and income		151,536
6.	Goods, adjusted, excluding military	84,707
7.	Services	32,289
8.	Income payments on foreign assets in the United States	35,740
9.	Unilateral transfers, net		9,481
A. What is Country A's total current accounts? _________$ Total current accounts B. What is Country A's balance on goods? _________$ Balance on goods C. What is Country A's balance on services? __________$ Balance on services D. What is Country A's balance on investment income? (Negative amount should be indicated by a minus sign.) __________$ Balance on investment income

ambercicada67

Q46. An appreciation of the U. S. dollar would
a. encourage foreigners to invest in the United States
b. discourage foreigners from buying U. S. goods
c. discourage the travel abroad of U. S. citizens
d. encourage foreign travel in the United States

Q47. The financial account of the balance of payments includes the purchase and sale of physical assets but not of financial assets.
a. true
b. false

Q48. Special Drawing Rights are issued by the
a. International Monetary Fund
b. Bretton Woods Organization
c. General Agreement on Tariffs and Trade
d. World Bank

Q49. The balance of payments includes
a. only exports, imports, and service transactions
b. the balance on current account, plus all capital transactions and all official transactions and the statistical discrepancy
c. only the official transactions
d. all goods and services produced in a nation's economy during a given year

Q50. A debit item on the U. S. balance of payments is any transaction that
a. results in a loss by U. S. sellers
b. results in a loss by U. S. buyers
c. makes foreigners use up their holdings of U. S. dollars
d. makes U. S. dollars available to foreigners

ECON 1010 Chapter Notes - Chapter 26: Loanable Funds, Real Interest Rate, Aggregate Demand

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