巴德 宏观经济学原理（英文版·第8版）Chapter 19 PowerPoint.pptxVIP

Why does our dollar fluctuate? 19When you have completed your study of this chapter, you will be able to1 Describe a country’s balance of payments accounts and explain what determines the amount of international borrowing and lending.2 Explain how the exchange rate is determined and why it fluctuates.CHAPTER CHECKLISTInternational Finance 19.1 FINANCING INTERNATIONAL TRADEBalance of Payment AccountsA country’s balance of payments accounts records its international trading, borrowing, and lending.Current account records goods and services to other countries (exports), minus payments for goods and services bought from other countries (imports), plus the net amount of interest and transfers received from and paid to other countries. 19.1 FINANCING INTERNATIONAL TRADECapital and financial account records foreign investment in the United States minus U.S. investment abroad.Official settlements account records the change in U.S. official reserves.U.S. official reserves are the government’s holdings of foreign currency.Table 19.1 on the next slide shows the U.S. balance of payments in 2015. 19.1 FINANCING INTERNATIONAL TRADE 19.1 FINANCING INTERNATIONAL TRADEPersonal AnalogyA person’s current account records the income from supplying the services of factors of production and the expenditures on goods and services.An example: In 2015, Joanne Worked and earned an income of $25,000.Had investments that paid an interest of $1,000.Her income of $25,000 is analogous to a country’s export.Her $1,000 of interest is analogous to a country’s interest from foreigners. 19.1 FINANCING INTERNATIONAL TRADEJoanne:Spent $18,000 buying goods and services to consume.Bought an apartment, which cost her $60,000.Joanne’s total expenditure was $78,000.Her expenditure is analogous to a country’s imports. Her current account balance was $26,000 – $78,000, a deficit of $52,000. 19.1 FINANCING INTERNATIONAL TRADETo pay the $52,000 deficit, Joanne borrowed $50,000 from the bank and use