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CAS EC 202 Chapter Notes - Chapter 17: Portfolio Investment, Foreign Direct Investment, Capital Account

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cyangerbil317
13 Dec 2016
School
Boston University
Department
Economics
Course
CAS EC 202
Professor
Geoffrey Carliner

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Document Summary

Chapter 17 globalization in goods ,capital and labor. For the last 30 years (since 1960), the us has consistently run a trade deficit (exports

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Related Questions

Chinese and U.S. trade

Find the value of Chinese imports and exports of goods and services, and US imports and exports of goods and services, expressed as a proportion of GDP, since 1982. Graph the series and comment on any trend. A good source of information is the World Bank's World Development Indicators at http://data.worldbank.org/data-catalog/world-development-indicators - go to 'Databank'€ and extract the relevant countries, variables, and years.

Then repeat the exercise with an index of import volume and an index of export volume. Graph the series and comment on any trend.

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.

When the U.S. runs a trade deficit with China, China is accepting debt, e.g. paper currency or government bonds, for the difference between exports and imports.