Reference no: EM133817006
Problem: Balance of Payments Memo
Write an analysis that links your country's trade to its financial flows, focusing around one particular issue, event, or policy. This could include the actions of a business. Length: as a rough guideline, aim for between 600 and 800 words of your own writing.
Here are some possible questions that this memo could be organized around. Please note that you would answer only one of these questions.
I. Identify a point at which the trade balance swings strongly from surplus to deficit, or vice versa. Explain why. Was this primarily a change affecting the current account, with the financial account adjusting? Or was this primarily a change affecting the financial account, with the current account adjusting?
II. If your country chronically runs a trade deficit or surplus, why? How is the deficit financed? What financial outflows correspond to a surplus?
III. If there are strong inflows or outflows of foreign investment, examine them and their effects on the overall balance of payments. You can do this from the point of view of a particular business located in your country. This might be a business that has received foreign financing, or a business that is engaged in direct investment in another country.