The U.S. Currently has a current account deficit with China. What would happen to the Dollar/Yuan...

The U.S. Currently has a current account deficit with China. What would happen to the Dollar/Yuan spot exchange rate and the U.S. current account deficit if there were a decrease in Chinese investmant in the U.S.? Describe and show graphically.

Expert Solution

Rahul Sunny answered 2 years ago

China has long pegged its currency (the Yuan) to the U.S. dollar. Assuming the free flow...

China has long pegged its currency (the Yuan) to the U.S. dollar. Assuming the free flow of capital across borders, explain why China cannot have an independent monetary policy reaction curve with a fixed currency.

Is the U.S. current account deficit driven by the U.S. budgetdeficit? Give at least 2...

Is the U.S. current account deficit driven by the U.S. budget deficit? Give at least 2 potential questions/hypotheses that can be tested on this topic.Describe the data that can be used and reference at least two scholarly articles

Discuss the domestic and international determinants of the U.S. current account deficit.

Can there be a deficit on current account and a deficit on capital account at the...

Can there be a deficit on current account and a deficit on capital account at the same time? Explain, giving an example.

a) Make a chart of the U.S. current account deficit, both in absolute $ value and...

a) Make a chart of the U.S. current account deficit, both in absolute $ value and as a share of GDP from 1990 to present. Find the most recent estimate of the U.S. current account deficit for the next two quarters (Note: depending on the availability of actual data. If actual data is available up to the third quarter of 2016, you should look for the estimate for 2016Q4 and 2017Q1). b) For the same sample period (1990-present), chart the...

what is the current account balance? what does a current account deficit do that is positive...

what is the current account balance? what does a current account deficit do that is positive for a nation? are here any thresholds between safe and dangerous levels of a deficit? (use the main accounting identity)

Is a current account deficit something to worry about? Explain a case that current account deficit...

Is a current account deficit something to worry about? Explain a case that current account deficit might not be something to worry.

What will happen to the value of the dollar if U.S. interests rates increase relative to...

What will happen to the value of the dollar if U.S. interests rates increase relative to interst rates in the rest of the world? Question 33 options: the dollar will appreciate and U.S. exports will become more expensive the dollar will appreciate and U.S. exports will become less expensive the dollar will depreciate and U.S. exports will become more expensive the dollar will depreciate and U.S. exports will become less expensive

Q5: Consider Australia running a current account deficit a/ Evaluate the statement “a current account deficit...

Q5: Consider Australia running a current account deficit a/ Evaluate the statement “a current account deficit is a tax burden on future generations”. Explain your working and answer in words. b/ Calculate the nominal exchange rate using the purchasing power parity concept when the foreign price level (for a typical easily transportable basket of goods) is $100USD and the domestic price level is $150AUD. Explain your working and answer in words. c/ Calculate the real interest rate if inflation is...

Discuss the evolution of the U.S current account deficit and net foreign assets: how much of...

Discuss the evolution of the U.S current account deficit and net foreign assets: how much of the evolution of the deficit (as a share of GDP) is due to changes in private savings, public savings (fiscal deficits) and investment rate (all as a share of GDP) and how much has the role of different factors changed over time? - Based on this analysis, are the U.S. current account and external debt sustainable? Does the U.S. differ or not from emerging...

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