Question

6.4 If investment spending in Australia has been strong, why would this reduce apprehension about the...

  1. 6.4 If investment spending in Australia has been strong, why would this reduce apprehension about the size of the current account deficit? What does the current account deficit have to do with investment spending?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
In Australia, the story has been quite different. Investment spending here has been at a historically...
In Australia, the story has been quite different. Investment spending here has been at a historically high level over much of the past decade. This has been primarily due to the strength of investment in the resources sector, which reached its highest share of activity in more than a century. So, unlike in other countries, there has been a significant addition to the capital stock in Australia over the past decade. We are seeing the fruits of that investment in...
What effect would government deficit spending have on interest rates? Explain. This change in interest rates...
What effect would government deficit spending have on interest rates? Explain. This change in interest rates caused by the government deficit spending would have a long run effect on investment spending. What effect would that be and why?
Suppose that a country, say Peru, has a growing current account defecit (X-M) is negative and...
Suppose that a country, say Peru, has a growing current account defecit (X-M) is negative and becoming more negative. Also Peru's money (Nuevo Sol) is rising in value relative to the US dollar and domestic investment spending (Id) in Peru is rising. According to our reading, is Peru's current account deficit a "disorder" or not? Explain why (In answering you would likely consider what the exchange rate and investment spending changes imply about the causes of the deficit--and whether the...
Opinion about Strong Dollar Recently U.S. dollar has been very strong relative to the major currencies....
Opinion about Strong Dollar Recently U.S. dollar has been very strong relative to the major currencies. Do you like it? How could a strong dollar affect U.S. firms?
Alicia Strong is a foreign exchange dealer for a bank in Australia. She wishes to consider...
Alicia Strong is a foreign exchange dealer for a bank in Australia. She wishes to consider whether International Parity Condition (IPC) holds between the British pound and the Australian dollar. Alicia also wonders whether she should invest in AUD or in British pounds (£) to make a covered interest arbitrage (CIA) profit. Depending on the CIA opportunity, she can borrow either A$1,000,000 or £1,000,000 to invest for the next 12 months. Consider Australia as home market and the UK as...
The United States presently has a current account deficit with Japan. What would happen to dollar/yen...
The United States presently has a current account deficit with Japan. What would happen to dollar/yen spot exchange rate and the current account deficit if there were a decrease in Japanese investment in the United States? Incorporate the foreign exchange market into your answer. I need a clear explanation about this question. Thank you so much!
SCENARIO “Australia currently has over 2000 wine exporters sending tens of thousands of different wines to...
SCENARIO “Australia currently has over 2000 wine exporters sending tens of thousands of different wines to 116 destinations worldwide. While Wine Australia, an Australian Government authority, has been working tirelessly over the years to promote the sale and consumption of Australian wine internationally and domestically, they haven’t had a permanent presence across the Asian region to help the wine sector capture export opportunities. This is unfortunate as the last four years have seen strong demand for Australian red wines in...
4. The U.S. has had a persistent current account balance deficit for over two decades. In...
4. The U.S. has had a persistent current account balance deficit for over two decades. In 2016, the current account balance deficit was equal to $481 billion: A. What is the definition of the current account balance? What categories of international transactions are included as part of it? Please give at least two examples of types of transactions that are included in each major category included in the calculation of the current account balance. B. Why does the U.S. have...
The federal government in Australia has been running large budget deficits. The government has stated that...
The federal government in Australia has been running large budget deficits. The government has stated that it will take actions that will turn the budget deficits into budget surpluses over time. Use a market for loanable funds graph to illustrate the effect of the federal budget surpluses. What happens to the equilibrium real interest rate and the quantity of loanable funds? What happens to the level of saving and investment? Now suppose that households believe that surpluses will result in...
Consider a situation where Turkey has a current account deficit. What can you conclude about Turkey's...
Consider a situation where Turkey has a current account deficit. What can you conclude about Turkey's levels of domestic savings, domestic investment, international capital flows, and their capital account? Assuming that Turkey has a floating exchange rate and perfect capital mobility, how would a decrease in the level of Kuwaiti savings impact their balance of payments?