Reference no: EM131431459

1. From your previous knowledge and/or an internet search, explain and discuss how one recent "balance of payments crisis" (since the 1980s) in a country of your choice has developed (i.e. its causes and consequences), like, for example, Spain in 2010. Discuss and compare your answer with another student answer. [maximum 250 words]

2. Explain why observing a current account deficit in a country is not necessarily worrisome. Discuss and compare your answer with another student answer.

3. Explain the relationship between private savings and government savings and the current account balance. Make an appropriate real-world example. . Discuss and compare your answer with another student answer.

4. If you go to the BEA website (https://www.bea.gov) and look at the Survey of Current Business for July 2010, the table on "U.S. International Transactions," you will find that in 2009, U.S. income receipts on its foreign assets were $585.2 billion (line 13), while the country's payments on liabilities to foreigners were $456.0 billion (line 30). Yet we saw in this chapter that the United States is a substantial net debtor to foreigners. Explain in your own words, also using examples if necessary, how it is possible that the United States received more income from foreign assets than it paid out. . Discuss and compare your answer with another student answer. [Hint: read the book chapter to clarify the issue if in doubt.]