Question

14. If South African nationals buy stocks of Apple Inc. at the New York Stock Exchange, it is reflected as A. A positive entry in US current account B. A negative entry in US current account C. A positive entry in US financial account D. A negative entry in US financial account ow to answer the following question (The Economist, 4 April March 2017) atest 12 Sbn 017 2 2Ja 34.5 Jan" +287.1 Jan 0.6Ja +14.4 04 47.5Jan +0.4Jam 3.2Jan 0.9 +8.3 France Germany Greece Ireland -59.2」 +281.1Jan -18.1 Jan +52.4 Jan +56.4 Jan 2.2Jan +8.0 +2.4 -0.7 Latvia 15. Take the case of the Ireland: It has a positive trade balance: +$52.4 billion and has a positive current account balance: +$14.4 billion. What can you say about the sum of net income and net transfers irn Ireland's current account? A. They sum up to a positive number B. They sum up to a negative number C. They sum up to zero 16. Recall the formula for the real exchange rate. If the prices in the US will increase, the prices in Japan will remain the same, and the nominal exchange rate of the Japanese yen to the US dollar (Yen/USD) tays the same, then the real exchange rate of Japanese dollar to the US dollar will fall A. True B. False 17. The rate at which one currency exchanges for another is called the A. nominal exchange rate B. real exchange rate is determined by

Answer 1

Exchange Rate is the price of 1 unit of a currency in terms of another currency. Current Account and Financial Account comprises the Balance of Payments.

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