EC140 Lecture Notes - Lecture 23: Capital Account, Reserve Currency, Potential Output

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Ec140 class 23 exchange rates chapter 34. Ie. dividends on a us company paid to a cdn credit in the current account. Actual budget deficit always > primary budget deficit. Structural budget deficit based on issues of business cycle. Structural: subtract taxes we would collect at potential gdp. A fall in the cad price of foreign currency is referred to as an appreciation of the cad. Records transactions b/w canada and the rest of the world. Buying and selling of goods, services and assets. Payment to canada recorded as a credit (positive) Payment from canada recorded as a debit (negative) Two main categories the current account and the capital account. Deals w/ trade in good/services and net investment income earned on foreign assets. Trade account payments and receipts related to the import/export of goods or services (including tourism) Capital-service account payments and receipts representing income on assets.

Related Questions

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

In 2001, the United Kingdom's economy exported goods worth £192 billion and services worth another £77 billion. It imported goods worth £225 billion and services worth £66 billion. Receipts of income from abroad were £140 billion while income payments going abroad were £131 billion. Government transfers from the United Kingdom to the rest of the world were £23 billion, while various U.K government agencies received payments of £16 billion from the rest of the world.

Calculate the U.K. merchandise trade deficit for 2001.
Calculate the current account balance for 2001.
Explain how you decided whether payments on foreign investment and government transfers counted on the positive or the negative side of the current account balance for the United Kingdom in 2001.

periwinklelocust363

1. Which of the following trading partners of the United States became its number one "trade problem" at the beginning of the 21^st century?

United Kingdom

Japan

Germany

Canada

China

2. Which of the following presents the correct picture of the outcome of increased world trade after the 1950s, contrary to Servan-Schreiber's prediction?

Third World countries have been excluded from this economic growth leading to stark imbalances in wealth.

The European Union has become the center of world trade, taking the position away from the United States.

The United States has continuously maintained the positive balance of trade it attained during the 1950s.

Economic power and potential has become more evenly distributed among the countries of the world.

SDRs and gold have lost their utility as the basic medium of financial exchange and most monetary statistics have started relating to the U.S. dollar.

3. The _____ of the balance-of-payments statement is most likely to record all merchandise exports, imports, and services plus unilateral transfers of funds.

current account

capital account

credit account

receivables account

reserves account

4. The Foreign Corrupt Practices Act (FCPA) was specifically addressed in the _____ section of the Omnibus Trade and Competitiveness act.

market access

export expansion

import relief

foreign exchange regulation

trade deficit

EC140 Lecture Notes - Lecture 23: Capital Account, Reserve Currency, Potential Output

EC140 Full Course Notes

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