Question

You attend a alumni event in Santiago Chile and you meet the Governor of the central...

You attend a alumni event in Santiago Chile and you meet the Governor of the central bank. The governor tells you that the country experiences “deficits in the capital account of the Balance of Payments.” Based on this statement, what do you infer about the Peruvian economy?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

A capital account shows the net change in physical or financial asset ownership for a nation and, together with the current account, constitutes a nation's balance of payments. The capital account includes foreign direct investment (FDI), portfolio and other investments, plus changes in the reserve account.

If a country has deficit in capital account,it means that it is investing more abroad and the rest of the world is investing less in Peru.If the capital account is in deficit,thw current account must be in surplus to equalize balance of payments.However,if the current account is also in deficit then the balance of payments would be in deficit.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Explain how exchange rates may correct a balance of trade deficit? You attend a alumni event...
Explain how exchange rates may correct a balance of trade deficit? You attend a alumni event in Santiago Chile and you meet the Governor of the central bank. The governor tells you that the country experiences “deficits in the capital account of the Balance of Payments.” Based on this statement, what do you infer about the Peruvian economy? What is a put on the USD? How do firms use a put option?
3. a. List and explain 2 criteria or factors that countries may use to fix or...
3. a. List and explain 2 criteria or factors that countries may use to fix or float their exchange rates. b. The IMF frequently prescribes devaluation and contractionary fiscal policy for developing countries operating fixed exchange rates and facing problems with excessive deficits in the current account of their balance of payments. These policies are frequently quite controversial. Based on what you learned in this chapter, can you provide a rationale for this particular combination of policies, as opposed to...
If the overall balance in the balance of payments account is in _____, there can be...
If the overall balance in the balance of payments account is in _____, there can be an accumulation of official reserve assets by the country or a decrease in foreign official reserve holdings of the country's assets. surplus deficit equilibrium remission Answer: The current account balance does NOT equal: the difference between domestic product and domestic expenditure. the difference between national saving and domestic investment. net foreign investment. the difference between government saving and government investment. Answer: A nation is...
CASE STUDY – Jacobson Carpet Company In January 2002, Ms. Mary Lewis was preparing to meet...
CASE STUDY – Jacobson Carpet Company In January 2002, Ms. Mary Lewis was preparing to meet with Mr. Carpenter, President of Jacobson Carpet Company. Ms. Lewis assumed that the meeting was related to the recent Board of directors of the company. As a direct assistant to the President, she knew from experience that this type of meeting often resulted in a project to be studied. Her expectation was confirmed as soon as Mr. Carpenter began to inform her of the...
For this assignment, you will create a BPMN diagram to depict the business process to get...
For this assignment, you will create a BPMN diagram to depict the business process to get a home mortgage based on the following narrative. You can use either DrawIO or BizAgi to create the process drawing. For this process, you can assume that the loan is a refinance not a home purchase. There are some small differences in the process to refinance an existing mortgage than to get a new mortgage. In the following narrative, I'm explaining all of the...
Argentina and Ecuador: Understanding the Currency Crisis While fiscal policy is never far from the mind...
Argentina and Ecuador: Understanding the Currency Crisis While fiscal policy is never far from the mind of your average Argentine, who remembers the tough times and hyperinflation of the 1980s, the events of 2001 and 2002 have brought fiscal policy back to the forefront of public concern. Though the early 1990s may have been characterized by financial optimism, Argentina has been in a recession since Brazil's 1998 monetary crisis sent shockwaves across the regional and global markets. In early 2002,...
1. It is time for Jung So Min Corp. to begin its annual budget preparation for...
1. It is time for Jung So Min Corp. to begin its annual budget preparation for its upcoming fiscal year, which ends on December 31, 2021. They are in need of temporary assistance in their accounting office, and have hired you to carry out the task of preparing the budgets. Jung So Min prepares quarterly budgets, and then from this information prepares an annual budget. To assist you in this task, Jung So Min has gathered the following information: 1)...
QUESTION 1 ? What is the relationship between family dysfunction and schizophrenia? a. ?Research has substantiated...
QUESTION 1 ? What is the relationship between family dysfunction and schizophrenia? a. ?Research has substantiated a link between family dysfunction and schizophrenia but can't say which causes the other. b. ?Family dysfunction is a major causative factor for schizophrenia. c. ?Research has failed to substantiate a direct causal link between family dysfunction and schizophrenia. d. ?Family dysfunction plays a minor role in developing schizophrenia. 1.00000 points    QUESTION 2 ? Chuck has no life plan; he simply lives from...
1. Which is the most accurate definition of the study of economics? [1] Distributing surplus goods...
1. Which is the most accurate definition of the study of economics? [1] Distributing surplus goods to those in need. [2] Dealing with affluence in a morally bankrupt world. [3] Using scarce resources to satisfy unlimited human wants. [4] Reducing human wants to eliminate the problem of scarcity. 2. Computer software represents [1] labour. [2] land. [3] capital. [4] entrepreneurship. 3. Suppose you have graduated with a degree in accounting and are offered a job with an accounting firm. But...
Question: summarize what you have read and how you believe (based on what we've studied so...
Question: summarize what you have read and how you believe (based on what we've studied so far) that topic should be approached from a law and policy perspective. Introduction The U.S.-Cuba relationship has been plagued by distrust and antagonism since 1959, the year Fidel Castro overthrew a U.S.-backed regime in Havana and established a socialist state allied with the Soviet Union. During the half century that followed, successive U.S. administrations pursued policies intended to isolate the island country economically and...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT