460PS#1 - Economics 460 P Conway 18 February 2010 I In...

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Economics 460 Problem Set 1 P . Conway Answer Sheet 18 February 2010 I. In Service to America (I) . 1. Tabular form: billions of $ US Goods Services Unilateral Transfers Long-term Capital flows Short-term private cap. flows Changes in official reserves Subtot al - 700 125 - 35 +410 +200 a -52 +52 b -22 +22 c + 7 -7 d +42 -42 e +21 -0.5 -20.5 f Just an announcement: no transaction at this time. Total - 679 173.5 - 57 -52 +414.5 +200 Merchandise Trade Balance: - $ 679 billion Balance of Trade in Goods and Services: - $ 505.5 billion Current Account: - $ 562.5 billion Official Settlements Balance: - $ 200 billion 2. Economic interpretations. You could include discussion of: MTB: lessened competitiveness of goods on world markets, as the imports of goods outweigh exports. The new transactions are positive on net because of the success of Caterpillar in selling earthmovers. BTGS: greater competitiveness of US services on world markets. The additional transactions include an improvement of the services surplus. CA: the US is not living within its means as evidenced by the deficit. The “unilateral transfers” columns indicates that a portion of the goods characterized as exports may have been given away.
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This note was uploaded on 05/01/2010 for the course ECON 460 taught by Professor Staff during the Spring '08 term at UNC.

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460PS#1 - Economics 460 P Conway 18 February 2010 I In...

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