Ch 10 Balance of payments

Is one better than the other 5 rule a countrys

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: untry's current account deficit should not exceed five percent of GDP Financial/Capital Account Financial/Capital Credits - Short term Credits Short Δ+ FR deposits in US banks banks Δ+ FR buys short term US FR securities (bills) securities Long term Δ+ FR buys long term US FR stocks or bonds or makes along term loan to US resident Δ+ FR’s FDI in US – via FR’s stock purchase or by buying land, building business asset, etc. business Debits - Short term Debits Short Δ+ USR deposits in foreign banks banks Δ+ USR buys short term USR foreign securities (bills) foreign Long term Δ+ USR buys long term USR foreign stocks or bonds or makes along term loan to foreign resident Δ+ USR’s FDI abroad – via USR’s stock purchase or by buying land, building business asset, etc. business Question? Question? What W...
View Full Document

Ask a homework question - tutors are online