Explain the three categories of balance of payments transactions
What will be an ideal response?
Current account transactions relate to sales and purchases of goods and services. These include goods, services, and unilateral transfers. The capital account consists of transactions involving financial assets. If there are no official reserve transactions, the sum of the current account and the capital account is zero. Official reserve transactions involve payments or receipts of official reserves by the government. If the United States is running a deficit so that foreigners are turning dollars in for reserves, the official reserves of the government will decrease.
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In the demand and supply analysis of ___________ markets, the “price” is the rate of return or the interest rate received.
a. financial b. retail c. industrial d. agricultural
Figure 4-25
Refer to . Producer surplus before the tax was levied is represented by area
a.
A.
b.
A + B + C.
c.
D + E + F.
d.
F.
If net exports are a negative number, then:
A. we are not buying enough exports. B. we are exporting less than we are importing. C. GDP will underestimated when measured using the expenditure approach. D. we are exporting more than we are importing.
The likely effect of a contractionary monetary policy in Japan would be to:
A. decrease the value of the dollar and increase the U.S. trade deficit. B. increase the value of the dollar and decrease the U.S. trade deficit. C. increase the value of the dollar and the U.S. trade deficit. D. decrease the value of the dollar and the U.S. trade deficit.