Suppose that the market for a country’s currency is in equilibrium and that its exports equal $400, its imports equal $500 billion, and rest-of-world purchases of the country’s assets equal $100....

Suppose that the market for a country’s currency is in equilibrium and that its exports equal $400, its imports equal $500 billion, and rest-of-world purchases of the country’s assets equal $100. Assuming it has no international transfer payments and that output is measured as GNP:

What is the country’s balance on current account?


a. What is the country’s balance on capital account?


b. What is the value of the country’s purchases of rest-of-world assets?




May 26, 2022
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