RQch17 - Ch 17 1.7 Yes. Because a country can run a trade...

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Ch 17 1.7 Yes. Because a country can run a trade deficit and have a current account surplus, it can simultaneously run a trade deficit and a financial account deficit. 1.8 If a country runs a surplus on the financial account, it must run a deficit on the current account. 2.4 a. ¥120 = £0.50 or ¥240 = £1 b. The dollar has appreciated against the yen and appreciated against the pound. The new exchange between the yen and the pound is ¥200 = £1, so the yen has appreciated against the pound. 2.8 a. The dollar appreciated against the yen. It takes 130 yen to purchase a dollar instead of 120 yen. b. (i) could have caused the shift in demand shown. 3.11 A reduction in capital inflows into the United States results in an increase in net foreign investment. As foreign investors decrease their demand for investments in the United States, they are also decreasing their demand for dollars , which causes the exchange value of the dollar to decline (i.e. lower equilibrium exchange rate for USD in terms of other
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This note was uploaded on 04/22/2010 for the course ECONOMICS ECON1002 taught by Professor None during the Spring '10 term at Hong Kong Institute of Vocational Education.

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RQch17 - Ch 17 1.7 Yes. Because a country can run a trade...

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