CHAPTER 5 The Balance of Payments and International Economic Linkages EASY (definitional) 5.1 A balance of trade deficit results in a current account a) deficit b) surplus c) IMF intervention d) World Bank loan Ans: c Section: Current account Level: Easy 5.2 The change in private domestic borrowing or lending required to keep payments in balance without adjusting official reserves is called a) the net liquidity balance b) the balance of payments c) the balance on current account
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A REPORT ON An empirical analysis of foreign trade composition‚ performance and trend of Bangladesh Executive Summary The report began with a brief overview of the purpose and cause of preparing it. Next it slides to the information about the backdrop of completing it. It covers almost about all necessary information of the respective topic. As every work has a specific function or purpose hence there is a relevant objective of this report. The introductory part ended with the limitations
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A Comparative Study of Balance of Payments and Export Promote Measures Between Pakistan and Malaysia Submitted by: Ch Farrukh Nadeem Submitted to: Ms. Naveeda Amir Course: Issues in pakistan Economy (ECO-515) Class: MSc Economics (2nd Semester) (Morning) Department of Economics National University of Modern Languages‚ Islamabad ********** Acknowledgement I am very thankful to ALLAH ALMIGHTY‚ who helped me to prepare this report in a better
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whether an improvement in a country’s terms of trade always works to its benefits The terms of trade measures the value of a unit of exports in terms of the number of imports it can buy‚ or the purchasing power of our exports. T.O.T= Export Price Index/Import Price index x 1000(base year) An increase in trade of terms is considered favourable A decrease in trade of terms is considered unfavourable A favourable or an increase in the terms of trade may occur because: -the average export price
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Essay Question: “Describe how cross-country trade and capital flows might have contributed to the 2008 global financial crisis. Critically evaluate evidence that‚ in turn‚ support and dispute that hypothesis.” 1000 words. Words: 1088 In the wake of the global financial crisis (GFC)‚ scholars have highlighted many key factors in order to find whom to hold responsible for it. Among these possible factors are the current account imbalances and the entailed capital flows‚ which have led to many
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Tools of Monetary Policy Applications of Open market operation: An open market operation is a kind of activity performed by the central bank to sale and purchase the govt. bonds which in directly contract and expands the money supply. Basically it is the tool which affects the federal funds rate it increases or decreases it. It is the most important tool of monetary policy. When the central bank purchases the securities it enhances the reserves of the commercial bank and in this way the can lend
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mercantilism. Mercantilism is characterized by the country applying policies and institutions such as the Navigational Acts‚ towards having a favorable balance of trade‚ extending borders‚ and having all of the economic goals set towards enriching the mother country. Having a favorable balance of trade was essential to mercantilism. A favorable balance of trade meant that there were more goods leaving the country to be sold (exports) than there were goods coming into the country to be bought (imports)
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Impact of Currency Devaluation on Trade Balance of Pakistan In a developing country large amount of exports consist of primary commodities and exports earnings due to the relative inelasticity of supply and uncertain production levels of primary goods‚ are not only unpredictable‚ but also vulnerable to a number of factors. The developing countries also depend upon the advanced industrial countries for most of their developmental needs (technology‚ capital‚ and producer goods) and consumption
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Guide Concepts Mastery TRADE DEFICITS Questions 100% 1 100% 2 TRADE TARIFFS 100% 3 TARIFFS 100% 4 EXCHANGE RATES 100% 5 TRADE RESTRICTION 100% 6 INTERNATIONAL TRADE; Score: 6 / 6 Concept: TRADE DEFICITS Mastery 1. 100% Questions 1 In the U.S. current account‚ most of the trade deficit results from an excess of imported A. merchandise and services B. merchandise C. services D. transfer Correct: The Correct Answer is: B. Concept: INTERNATIONAL TRADE; Mastery 100% Questions
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The balance of trade is the difference between the value of exports and imports in an economy over a certain period of time. A positive balance of trade is known as a trade surplus and occurs when value of exports is higher than that of imports; a negative balance of trade is known as a trade deficit or a trade gap. Economies with a weaker currency can export more and import less than economies with a stronger currency. Let’s compare Mexico and US. Mexico has a trade deficit. The trade
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