《short answer-国际经济学》.docVIP

SHORT ANSWER 1. What are the components of the current account of the balance of payments? ANS: The current account includes transactions in goods and services, income flows, and unilateral transfers. 2. Concerning the balance of international indebtedness, when is a country a net creditor or a net debtor? ANS: A country is a net creditor when its claims on foreign nations exceed foreign claims on it. The nation is a net debtor when foreign nations claims on it exceed its claims on foreign nations. ESSAY 1. How do we measure the international investment position of the United States at any point in time? How did the U.S. become a net debtor nation so rapidly? ANS: The international investment position of the United States is measured by the monetary value of U.S. assets abroad versus foreign assets in the United States. Unlike the balance of payments, which is a flow concept, the balance of international indebtedness is a stock concept. The reason for the U.S. becoming a net debtor nation is that foreign investors have placed more funds in the United States than the U.S. residents have invested abroad. The United States has been considered attractive to foreign investors. 2. What does a current account deficit mean? ANS: When a country realizes a deficit in its current account, it has an excess of imports over exports of goods, services, income, and unilateral transfers. This leads to an increase in net foreign claims upon the home country. The home country becomes a net demander of funds from abroad, the demand being met through borrowing from other countries or liquidating foreign assets. The result is a worsening of the home countrys net foreign investment position. SHORT ANSWER 1. What foreign exchange transactions do banks typically engage in? ANS: Banks typically engage in spot, forward, and swap transactions. 2. How is the equilibrium rate of exchange determined? ANS: The equilibrium rate of exchange in a free market is determined by the intersection（交集