Exam 18: B: The Balance of Payments and Exchange Rates

Assume that Switzerland and Britain have flexible exchange rates.Other things unchanged, if a tight money policy raises interest rates in Britain as compared to Switzerland:

A nation's merchandise balance of trade is equal to its exports less its imports of:

In considering British pound and dollar, the rates of exchange for the pound and the dollar:

The following table shows the balance of payments statement of Transylvania for 2013.All the figures are in billions of dollars. Refer to the above data.In 2013, foreigners made a smaller volume of investments in Transylvania than Transylvanians invested abroad.

When the people involved in an exchange are from countries that use different currencies, an intermediate asset transaction has to take place:

The following table shows the balance of payments statement of Transylvania for 2013.All the figures are in billions of dollars. Refer to the above data.In 2013, Transylvania realized a $1 billion surplus on goods and services.

The sum of a nation's current account balance and its capital account balance in any year is always equal to zero.

The following table indicates the dollar price of libras, the currency used in the hypothetical nation of Libra.Assume that a system of flexible exchange rates is in place. Refer to the above table.The exchange rate is:

In the balance of payments of Canada, Canadian merchandise imports are recorded as a:

The following table shows the balance of payments statement for the hypothetical nation of Zabella for 2014.All the figures are in billions of dollars. Refer to the above data.In 2014, Zabella's balance on the capital account shows a:

Under the managed floating system of exchange rates:

The following table shows the balance of payments statement of Canada for 2014.All the figures are in billions of dollars. Refer to the above information.In 2014, Canada's balance of services was:

Evidence of a chronic balance of payments deficit is:

The several financial crises in which country required a massive financial bailout by the International Monetary Fund.

In considering pounds and dollars, when the dollar rate of exchange for the British pound rises:

If the rate of exchange for a British pound is $4, the rate of exchange for the dollar:

Appreciation of the Swiss franc will:

The following table shows the balance of payments statement of Transylvania for 2013.All the figures are in billions of dollars. Refer to the above data.In 2013, Transylvania realized a balance of payments deficit.

Suppose one Canadian dollar would buy 262 yen in 2005.However, it would buy only 123 yen in 2012.Relative to the yen, the value of the dollar:

Suppose the current account balance of an economy is -$50 billion and the capital account balance of the economy is $61 billion.Given the information, it can be said that the balance in the official settlement account is: