Reference no: EM13731028
Exercise 1: Show the debit and credit entries in each balance-of-payments account – goods, services, income, unilateral transfers, direct investment, portfolio investment, other capital and reserve assets – for the following transactions. Then, combine all the transactions to determine 1) the balance on merchandise trade, 2) the balance on goods, services, and income, 3) the current account balance, 4) the balance on private capital, 5) the financial account balance, and 6) BoP surplus/deficit. Interpret the results.
1. A domestic college student travels abroad for the holidays and spends $1,000 on food and lodging.
2. A domestic auto dealership imports a $20,000 automobile.
3. The home government gives a drought-stricken nation food and medicine worth $1 million as a humanitarian gesture.
4. A domestic resident receives a $100 interest payment on a foreign government bond he/she owns.
5. A foreign resident purchases a $10,000 domestic treasury bill from a domestic brokerage firm.
Exercise 2: Show the debit and credit entries in each balance-of-payments account – goods, services, income, unilateral transfers, direct investment, portfolio investment, other capital and reserve assets – for the following transactions. Then, combine all the transactions to determine 1) the balance on merchandise trade, 2) the balance on goods, services, and income, 3) the current account balance, 4) the balance on private capital, 5) the financial account balance, and 6) BoP surplus/deficit. Interpret the results.
1. The home government sells $29 million worth of wheat to a foreign country from its surplus stockpiles, being paid with $29 million in gold by the foreign government.
2. A domestic company buys $34 million in natural gas from a foreign firm and pays for the gas by writing a check on its deposits in a domestic bank.
3. Foreign soccer fans spend $6 million as tourists in the home country during a soccer tournament.
4. The home country’s Treasury pays $25 million interest on its past borrowing from foreign investors, paying with checks on a domestic bank.
5. The home government gives $8 million in foreign aid to a foreign government in the form of wheat from its own stockpiles.
6. A domestic firm signs an agreement with a foreign firm bartering its managerial services and trademarks for $10 million of the foreign firm’s merchant ships.
7. A domestic bank lends a foreign government $184 million in a new loan so that the foreign government simultaneously pays the domestic bank $184 million in interest on an old loan.
8. Domestic tourists spend $1 million in foreign countries.
9. Domestic residents own $900 million of bonds issued by foreign governments.
Exercise 3: The following information is a nation’s international transactions during a year ($ millions):
Exports of goods 490
Imports of goods 522
Exports of services 267
Imports of services 148
Income, net 5
Current transfers, net -10
Private capital outflows, net 382
Private capital inflows, net 404
1. Calculate the nation’s balances on merchandise trade, goods and services, current account, and capital and financial account.
2. What is the value of the official reserves assets (net)?
|
What are monthly payments for the four traditional mortgages
: What are the monthly payments for the 4 traditional mortgages, the bullet and the IO loans? If the Storys want the lowest monthly payment, which alternative is the best? Which of the 10 options (4 traditional, 4 smart, bullet and IO) would be chosen ..
|
|
What is the diamonds-water paradox
: 1. Medicare recipients pay a monthly premium for coverage, must meet a annual deductible, and have a co-payment for doctors office visits. What impact would an increase in the monthly premium have on their consumer surplus? What would be the impact o..
|
|
What are the implications of this increase for operations
: In the past year, a hospital's average age plant Ratio has increased from 5.0 to 10.0. what are the implications of this increase for operations for the next few years? (the industry average is 9.0)
|
|
Need to include both an industry
: Use the graphing information and data provided in the previous lesson to complete this activity. You will need to include both an industry (total market) and a firm (individual business) graph for each question. On the firm graphs, you will need to i..
|
|
Debit and credit entries in each balance-of-payments account
: Show the debit and credit entries in each balance-of-payments account – goods, services, income, unilateral transfers, direct investment, portfolio investment, other capital and reserve assets – for the following transactions. Calculate the nation’s ..
|
|
Describe the u.s economic performance during the past
: Describe the U.S economic performance during the past ten years. Please make use of time series data on employment, inflation, GDP, and trade balance. Tables and graphs are strongly encourage. ((Answer should not be less than 1,000 words)
|
|
Recommendations with respect to the capital budgeting
: Your company Portfolio Manager is convening a review board in the first calendar quarter to consider three projects. You have been asked to provide recommendations with respect to the capital budgeting aspects of these projects. Your recommendations ..
|
|
Equal annual instalments
: Debbie borrows $3,500 from the bank at 12 percent annually compounded interest to be repaid in four equal annual instalments. What is her annual payment? What is the interest paid in the first year. What is the principal paid in the first year?
|
|
Anka company has two service departments
: Anka Company has two service departments, Maintenance Department and Personnel Department, and two producing departments, X and Y. The Maintenance Department costs of $240,000 are allocated on the basis of standard service hours used. The Personnel D..
|