Q3. (10 points-2 points each) Suppose that Turkey has a large current account deficit. As a...

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Q3. (10 points-2 points each) Suppose that Turkey has a large current account deficit. As a result of each of the following activities in (i) – (v), state whether there will be a larger, or a smaller current account deficit in Turkey, or there will be no change in the Turkish current account deficit: i) A Turkish firm imports $12,000 worth of textile machinery from Italy. ii) Turkish government sends a disaster relief shipment of medical materials to Somalia which is worth of $10,000. iii) A Turkish firm bought a production plant in Germany worth of €50 million. iv) The crew of the Turkish Airlines on its flight to Shanghai has spent the night there and has spent $3,000 for accommodation. Iragi businesses borrowed $10 million from the Turkish banks. v) Q3. (10 points-2 points each) Suppose that Turkey has a large current account deficit. As a result of each of the following activities in (i) – (v), state whether there will be a larger, or a smaller current account deficit in Turkey, or there will be no change in the Turkish current account deficit: i) A Turkish firm imports $12,000 worth of textile machinery from Italy. ii) Turkish government sends a disaster relief shipment of medical materials to Somalia which is worth of $10,000. iii) A Turkish firm bought a production plant in Germany worth of €50 million. iv) The crew of the Turkish Airlines on its flight to Shanghai has spent the night there and has spent $3,000 for accommodation. Iragi businesses borrowed $10 million from the Turkish banks. v)

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i In Macroeconomics or International Economics the Current Account is an essential component of the Balance of PaymentsBOP which is also alternatively known as the Balance of Trade It is mathematicall... View the full answer