ECON 295 Chapter Notes - Chapter 20: Foreign Portfolio Investment, Shock Absorber, Longrun

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fuchsiagnu85

12 Apr 2017

School

McGill University

Department

Economics

Course

ECON 295

Professor

Mayssun El- Attar Vilalta

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Document Summary

Chapter 35: exchange rates and the balance of payments. Balance of payments accounts: a summary record of a country"s transactions with the rest of the world, including the buying and selling of goods, services, and assets. Transactions that represent a receipt for canada are recorded in the bop accounts as a credit item. Transactions that represent a payment for canada are recorded in the bop accounts as a debit item. Trade account records payments and receipts arising from the import and export and goods and services: exports are a receipt and are a credit on the trade account, payments to foreigners are a debit imports. Capital-service account records the payments and receipts that represent income on assets, such as interests and dividends: earn income is receipt. Capital account: (assets) the part of the balance of payments accounts that records payments and receipts arising from the import and export of long-term and short-term financial capital.

Related Questions

QUESTION 10

Below is a table for the Balance of Payments of Goegania, a prosperous island nation.

Current Account			Financial Account
Exports of Goods	$1,940		Capital Inflow	$661
Imports of Goods	???		Capital Outflow	$347
Trade Balance		???	Financial Account		???
Exports of Services	$569		Capital Account		$0
Imports of Services	???		Statistical Discrepancy		$0
Services Balance		$16	Balance of Payments		???
Income Received on Investments	$704
Income Paid on Investments	$505
Net Income on Investments		???
Net Transfers		$-168
The balance on the Current Account		???

Given this information, what is the value for the imports of goods?

Sometimes this question generates some weird numbers. Remember that you would always add the values in a category to get the total. So the total for the Financial Account is always Capital Inflow + Capital Outflow and the Trade Balance is always Exports + Imports for this table. It's just that sometimes those values being added are negative. If you get a negative answer, you should enter in the negative.

lavendertermite76

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

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

ECON 295 Chapter Notes - Chapter 20: Foreign Portfolio Investment, Shock Absorber, Longrun

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