EC249 Lecture Notes - Lecture 24: Canadian Dollar, Foreign Exchange Market, Excess Supply
Document Summary
This assignment is due by 5:00 p. m. on wednesday, september 24, 2014. Lesson 1 questions: below is a table containing the balance of payments accounts for a hypothetical economy, complete the table by entering correct and consistent figures in the shaded boxes. (8 marks, current account $ billions. Balance on current account (ca: capital account $ billions. What is the numerical value of the difference between gdp (q) and absorption (a)? (4 marks) The absorption is higher than gdp because of the current account deficit. Gdp minus net exports give you absorption, and because net exports is negative, gdp will be higher without it. What is the numerical value of the difference between national income (y) and absorption (a)? (4 marks) National income is smaller than absorption because the difference between primary income receipts and payments is -23 billion. The current account deficit is only -15 billion thus making national income smaller than absorption.
