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Unformatted text preview: and our imports from the Congo should (increase/decrease).
7. If the euro price of the dollar decreases the euro will (appreciate/depreciate) and their exports will (increase/decrease). • Measure of money inflows and
outflows between the U.S. and
the Rest of the World (ROW).
– Inflows are referred to as CREDITS
– Outflows are referred to as DEBITS
• The Balance of Payments is divided
into 3 accounts.
– Current Account
– Capital/Financial Account
– Official Reserves Account [foreign
currency holdings of the Fed] IN OUT • Every transaction in the balance of payments is
recorded twice in accordance with standard
– Ex. U.S. manufacturer, John Deere, exports $50 million
worth of farm equipment to Ireland.
• A credit of $50 million to the current account.
( - $50 million worth of farm equipment or physical assets).
• A debit of $50 million to the capital/financial account.
( + $50 million worth of Euros or f...
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This note was uploaded on 07/20/2012 for the course ECON 2106 at GCSU.