ECS3704 Assignment 1 Semester 1 2023 (211581)

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Americans buy stock in Mexico - --FA purchase of foreign asset -sell dollars for pesos and the mexican firms buy american goods - -+CA US export -Sell dollars to the central bank for pesos -... -FA+ fed reduces foreign currency holdings -Americans import goods from china - -CA- US import -China buys our government bonds - -+FA Foreigners buy US assets -The central bank buys reserve assets - --FA fed buys reserve assets -US sells bonds in exchange to foreigners - -+FA Foreigners buy US assets -Nigeria sells oil - -CA+ Nigeria exports -Nigeria exchanges dollars for local currency - -FA- Nigeria central bank buys dollars -Sp+Sg= - -I+NX or National savings -Sg= - -T-G (budget balance) -interest rate? Sp? Investment? Government borrowing? Government reduces spending: - -- interest rate will fall - less private saving -reduce the demand for borrowing by the government -less govt. borrowing -more investment -interest rate? Sp? Investment? Government borrowing? consumers are feeling more confident about the economy: - --interest rate will rise -Sp decreases - investment will fall -govt. borrowing unchanged - supply of funds will decrease -interest rate? Sp? Investment? Government borrowing? businesses are feeling more optimistic about the economy: - --interest rate will increase -Sp will rise -govt. borrowing unchanged -Demand for funds will increase because businesses are more willing to take out loans to pay for investment spending -interest rate? Sp? Investment? Government borrowing? the government increases personal income taxes: - --interest rate will fall -less private saving -investment will rise -Decrease in demand for borrowing by the government -decrease in supply of funds by consumers due to less disposable income [Show More]

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ECS3704 Assignment 1 Semester 1 2023 (211581) Questions and Answer {Distinction A+}

National Income Accounting - -Measurement of the national economy's performance, dealing with the overall economy's output and income -Gross Domestic Product (GDP) - -Total dollar value of all fina...

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