Question

In: Finance

It is NOT possible to have a deficit in the trade balance and a surplus in...

It is NOT possible to have a deficit in the trade balance and a surplus in the current account balance

true

false

Securities are a asset items in the Feds Balance sheet

true

false

Solutions

Expert Solution

1. This given statement is FALSE because there can be deficit in the trade balance and surplus in the current balance account at many times, because of various types of nature of expenditure that are representative of those accounts.

Given statement is FALSE

2.Federal Reserve balance sheet is just like another balance sheet, and securities are always asset in the Federal Reserve balance sheet, so the given statement is TRUE.

Given Statement is TRUE.


Related Solutions

Has Qatar experienced a balance of payments trade deficit or surplus in the past year? How...
Has Qatar experienced a balance of payments trade deficit or surplus in the past year? How large is this deficit or surplus? Has its official reserves account changed in the past year? By how much? Has Dubai experienced a balance of payments trade deficit or surplus in the past year? How large is this deficit or surplus? Has its official reserves account changed in the past year? By how much?
Is it trade deficit or trade surplus that contributes more to economic growth? Why? What are...
Is it trade deficit or trade surplus that contributes more to economic growth? Why? What are the factors that increase and decrease the demand for a foreign currency? What are the impacts of currency devaluation and revaluation on international trade? What is currency war? How does it affect trade between countries?
what is the impact of trade surplus (exporting more than importing) and trade deficit (importing more...
what is the impact of trade surplus (exporting more than importing) and trade deficit (importing more than exporting) on GDP, employment, and the exchange rate of the country's currency?
Moreover, what is the impact of trade surplus (exporting more than importing) and trade deficit (importing...
Moreover, what is the impact of trade surplus (exporting more than importing) and trade deficit (importing more than exporting) on GDP, employment, and the exchange rate of the country's currency?
How do each of the following transactions affect:     (1) the trade surplus or deficit for...
How do each of the following transactions affect:     (1) the trade surplus or deficit for the United States AND     (2) capital inflows or outflows for the United Statesa. A Chinese exporter sells television sets to U.S. consumers, and uses the U.S. dollars earned to buy government debt.The purchase of imported TVs creates a trade  (Click to select)  surplus  deficit  and the Chinese purchase of U.S. bonds creates a capital  (Click to select)  outflow  inflow  .     NX (trade balance)  (Click to select)  >  =  <    0.     KI (net capital inflows)(Click to select)  >  <  =    0.    ...
How do each of the following transactions affect: (1) the trade surplus or deficit for the...
How do each of the following transactions affect: (1) the trade surplus or deficit for the United States AND (2) capital inflows or outflows for the United States a. A U.S. exporter sells software to Israel. She uses the Israeli shekels received to buy stock in an Israeli company. The U.S. export creates a trade (Click to select)deficitsurplus and the purchase of Israeli stock creates a capital (Click to select)outflowinflow. NX (Click to select)>=< 0. KI (Click to select)<>= 0....
A government began 20XX with a budget surplus and a trade deficit. The government changed its...
A government began 20XX with a budget surplus and a trade deficit. The government changed its policy and is now running a budget deficit. If all other factors remain constant, this change in policy will lead to: Group of answer choices A. a decrease in the trade deficit without any affect on the exchange rate. B. a decrease in both the exchange rate and the trade deficit. C. increased government borrowing and an increase in the trade deficit. D. an...
Explain how it is possible for a country to have a positive balance of trade but...
Explain how it is possible for a country to have a positive balance of trade but a negative balance of payments.
Country A has 100b$ trade deficit against Country B, and Country B has 200b$ trade surplus...
Country A has 100b$ trade deficit against Country B, and Country B has 200b$ trade surplus against Country C, and Country C has 150b$ trade surplus against Country A. Moreover, assume that Country B has a balanced trade with other countries (countries other than A and C), but Country A has 100b$ trade surplus against other countries (countries other than B and C) and Country C has 100b$ trade deficit against other countries (countries other than A and B). Then,...
Explain the difference between a trade deficit, a current account deficit, and a balance of payments...
Explain the difference between a trade deficit, a current account deficit, and a balance of payments deficit. Explain fully why a current account deficit can be good for a country.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT