Exam 9: The Exchange Rate and the Balance of Payments

If a countryʹs central bank does not intervene in the foreign exchange market, the country has

Currently, the United States is both a net borrower and a debtor nation.

During most of the 1980s, 1990s, and 2000s the U.S. has had a_________ current account balance and a _________capital and financial account balance.

A debtor nation means a nation

The account that records the receipts from the exports of goods and services sold abroad, the payments for imports of goods and services from abroad, net interest income paid abroad, and net transfers is the .

U.S. official reserves are the__________.

If the United States sells beef to Japan, the U.S. beef producer is paid with

The Fed__________ intervene in the foreign exchange market by supplying dollars and the Fed Intervene in the foreign exchange market by demanding dollars.

Net exports equals

Suppose the current exchange rate between the Chinese yuan and the United States dollar is 7 yuan per dollar. If the Fed sought to drive up the exchange rate to 8 yuan per dollar then it would

If a country has a capital and financial account surplus, that countryʹs stock of international indebtedness is

Suppose that the yen-dollar foreign exchange rate changes from 130 yen per dollar to 140 yen per dollar. Then the yen has

The Federal Reserve can influence the exchange rate by

Item Billions of bonts GDP 320 Consumption exp enditure 200 Government exp enditure on goods and services 60 Investment 80 Exp orts of goods and services 40 Government budget deficit 25 -The table above shows some data for Wiland, a country whose currency is the bont. The official settlement balance, net interest income, and net transfers from abroad are zero. a) What is Wilandʹs imports of goods and services? b) What is Wilandʹs current account balance? c) What is Wilandʹs capital account balance? d) What is Wilandʹs net taxes? e) What is Wilandʹs private sector balance?

Saudi Telecom is a major producer of telecommunications equipment in Saudi Arabia. The Free Market Iraqi Conglomerate FMIC) is a collections of over 100 firms that wish to upgrade the communications infrastructure of Iraqi. When FMIC buys $4.5 million U.S. dollars worth of equipment from Saudi Telecom, the

Suppose China Airlines wants to purchase a French Airbus. The price of the Airbus is 95 million Euro. If the exchange rate is 1 euro per 10 yuan, the price of this airplane to China Airlines is

When the United States imports goods and services from the rest of the world,

Item Millions of crumbs Imports of goods and services 2,000 Exp orts of goods and services 3,000 Borrowing from the rest of the world 1,500 Net investment income p aid to foreigners 60 Net transfers paid to foreigners 60 -The table above shows the transactions made during 2011 by the citizens of Biscuit, whose currency is the crumb. During 2011, the official reserves increased by 380 million crumbs. Calculate the current account balance.

Item 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 For eign investment in Urland 321 -The above table shows some of the balance of payments accounts for Urland. What is Urland?s balance on the current account?

Suppose U.S. net exports are -$400 billion and the U.S. government sector surplus is $200 billion. Then in the private sector, saving minus investment equals