MicroChapter24HW - NAME: DATE: GRADE: Micro Chapter...

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NAME: DATE: GRADE: Micro Chapter Twenty-four HW – Exchange Rates, the Balance of Payments, and Trade Deficits 1..Thefollowing data describes the economy of Antarctica in 2050: a. Calculate Antarctica's current account balance. b. Calculate Antarctica's capital account balance. c. Calculate the increase in Antarctica's official reserves. 2. In Antarctica in exercise 1, a. Is Antarctica a debtor nation or a creditor nation? b. Are Antarctica's international assets increasing or decreasing? c. Can you determine whether Antarctica is borrowing to finance investment or consumption? Why or why not? 3. The U.S. dollar appreciates, and the nation's official holdings of foreign currency increase. State which of the following events could have caused these changes to occur, and why: a. The Fed intervened in the foreign exchange market and sold dollars. b. The Fed intervened in the foreign exchange market and bought dollars. c. People began to expect the dollar to appreciate.
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This note was uploaded on 05/18/2008 for the course ECON 251 taught by Professor Spencer during the Spring '08 term at Northampton Community College.

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MicroChapter24HW - NAME: DATE: GRADE: Micro Chapter...

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