(e) A firm in country A purchases $3,000 of shipping services from a country B ocean...
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(e) A firm in country A purchases $3,000 of shipping services from a country B ocean freight carrier, paying for the services by drawing down bank deposits in B owned by the A firm. (f) A's central bank buys $2,000-worth of foreign currency holdings held in a B commercial bank by an A citizen. The central bank adds the foreign currency to its own commercial bank account in country B. 2- Suppose that you had to explain to a person (who is not an economist) why a current account deficit must be accompanied by a financial or capital account surplus. What would you say? (e) A firm in country A purchases $3,000 of shipping services from a country B ocean freight carrier, paying for the services by drawing down bank deposits in B owned by the A firm. (f) A's central bank buys $2,000-worth of foreign currency holdings held in a B commercial bank by an A citizen. The central bank adds the foreign currency to its own commercial bank account in country B. 2- Suppose that you had to explain to a person (who is not an economist) why a current account deficit must be accompanied by a financial or capital account surplus. What would you say?
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To explain why a current account deficit must be accompanied by a financial or capital account surplus I would provide the following explanation A cou... View the full answer
Related Book For
Financial Theory and Corporate Policy
ISBN: 978-0321127211
4th edition
Authors: Thomas E. Copeland, J. Fred Weston, Kuldeep Shastri
Posted Date:
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