look at question 4 on attached file

Question 4 The table below summarizes hypothetical transactions, in billions of U.S. dollars, that took place during a given year.

a) Calculate the U.S. merchandise trade, services, goods and services, income, unilateral transfers, and current account balances.

ECON 340 - International Economics (3 credits) Course Outline - Spring 2020 School of Business and Information Systems - York College Homework 2 Instructions: This is homework 2. It covers chapters 8, 10 and 12 of the textbook. It should be typed and make sure to provide all the working (where necessary) for your answers. No late submission. Due date: 05/08/2020 Question 1 a) Concerning the balance of international indebtedness, when is a country a net creditor or a net debtor? b) What are the components of the current account of the balance-of-payments? c) What does a current account deficit mean? d) How do we measure the international investment position of the United States at any point in time? How did the U.S. become a net debtor nation so rapidly? Question 2 a) What is the purchasing power parity approach to exchange rate determination? b) What is exchange rate overshooting? c) What is the asset market approach to exchange rate determination? d) In a free market, what determines exchange rates in the long run and the short run? Question 3 a) What is meant by economic integration? b) What factors influence the extent of trade creation and trade diversion? c) Who were the losers in the United States as a result of the North American Free Trade Agreement? d) Explain the theory of optimum currency areas? Question 4 The table below summarizes hypothetical transactions, in billions of U.S. dollars, that took place during a given year. a) Calculate the U.S. merchandise trade, services, goods and services, income, unilateral transfers, and current account balances. b) Which of these balances pertains to the net foreign investment position of the United States? How would you describe that position? c) Given the hypothetical items shown in the Table below, determine the international investment position of the United States. Is the United States a net creditor nation or a net debtor nation? 2