Question: Show that the current account is the difference between savings and investment. What does this imply for international capital flows? Are current account deficits

Show that the current account is the difference between savings and investment.

Show that the current account is the difference between savings and investment. What does this imply for international capital flows? Are current account deficits good or bad? What factors would your answer depend on?

Step by Step Solution

★★★★★

3.26 Rating (144 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The current account is a component of a countrys balance of payments and represents the difference between its savings and investment It is calculated as the sum of the balance of trade exports minus ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

The first case at the end of this chapter and numerous subsequent chapters is a series of integrative cases involving Wal-Mart Stores, Inc. (Walmart). The series of cases applies the concepts and...

The 2006 Economic Report of the President directly addressed whether the United States can continue to run large current account deficits and, of course, financial account surpluses. In the report,...

Consider again the end-of-chapter problem 8.9 about the impact of international trade on child labor in the developing world. A: Suppose again that households have non-child income Y , that children...

We showed in Eq. (2.10) that S = I + CA, where S is national saving, I is investment, and CA is the current account balance. Calculations of national saving and investment depend on the treatment of...

1. Laura bought 100 shares of stock X for $50/share at the start of 2013. During that calendar year, each share paid 4 dividends of $.25 each, plus its price rose to $55. She still owns these shares....

1. A 10 year bond, which has just been issued, provides semiannual coupons of 6% a year in arrears. It is redeemed at par. What price is paid (per $100 nominal value) if bond yields an annual...

Task 03. Question is based on this article: Policymakers Must Use Fiscal Stimulus in a Recession The CBO and Blinder-Zandi analyses bear out Romer's belief that ARRA moderated the Great Recession....

QUESTIONAS [4:30 PM, 2/27/2022] flo: Additional instructions from the student: SUBJECT: BUSINESS ETHICS JOURNAL REVIEW References: any news, articles, issues, research regarding to the subject...

Describe the operations of Euro bond market, Foreign bond market, International equity market Who is called as financial manager? What goal should always motivate the actions of the financial...

I need this quiz answered asap. Let me know how can we sort this out since it is too long. Refer to the following selected nancial information from McCormik, LLC. Compute the company's working...

The moment of inertia of a cross-sectional area is dependent on... the size of its area and the material the size of its area the size and shape of its area the size and shape of its area and the...

Using the PSPICE Schematics editor, draw the circuit in Figure P6.73, and use the PROBE utility to find the maximum values of vL(t), iC(t), and i(t). VL () i (t) 0.5 mH 1c Ri 700 6 A R2 500

If overhead variance is immaterial, then it is disposed of by assigning it to 1 2 a . finished goods inventory. b . cost of goods sold. 3 c . distribution costs. d . work - in - process inventory.

Verify whether the Cauchy-Riemann equations are satisfied for the following function: sinh(kz)

1) Construct the representative household's utility maximisation decentralised problem such that a4 = 24-1e#+Et, whereby & N 0, 02); find the optimal rules attendant on consumption, labour and...

What does Borgia do with Messer Remirro de Orco after he brings peace to Romagna under Borgia's rule?Borgia promotes him to head his advisory council.Borgia sends him to Valentinois to subdue its...

Shocks and the current account. A small open economy is inhabited by two-period-lived individuals who receive an exogenous endowment, y ,, in the period when they are born and receive no further...

7 Show how a current account defcit and a fxed exchange rate could lead to a recession.

QUESTION THREE Pitso and Steve are partners operating a business Topclass Pro Services. The information that follows is relevant to the business activities of the partnership for the year ended 30...

Hi there. I need my assignment checked please by an expert. Correct what is wrong. Please be sure of it. I will post the questions in the photos. and the answers I'll list them below. I need it by...

QUESTION ONE [20] The following transactions during January 2020 relate to County Traders: Date January Details Amount (R) 01 Paid for rental of equipment. 500 04 Purchased a vehicle on credit from...

BALANCE SHEETAs on 10 -Oct -2018 Account DetailsA/CCodeDebitCredit ASSETS FIXED ASSETS FIXED ASSETS FIXED ASSET- OFFICE EQUIPMENTS 4 , 183.00 FIXED ASSET - FURNITURE & FIXTURES 247.00 FIXED ASSET -...