HOW TO DO 2 20 marks The balance of payments accounts of.pdf

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HOW TO DO? 2. (20 marks) The balance of payments accounts of a hypothetical economy, Democracy for the year 2013 is as follows. Assume no statistical discrepancy. - Current account: $1000 million - Nonreserve financial account (NFA): - $850 million - Capital account: $75 million - Trade balance: $700 million - Net unilateral transfers: - $50 million - External wealth: $1295 million a. (4 marks) Calculate Democracy's financial account balance. Is Democracy a net exporter or a net importer of assets? b. (4 marks) Calculate the official settlements balance for Democracy. Use hypothetical figures to show the breakdown of the official reserve transactions. Based on the figures you constructed, does the Central Bank of Democracy experience a decrease or an increase in its foreign reserve holdings? c. (4 marks) Is Democracy a net lender or a net borrower? Explain how you know. d. (4 marks) Show the values of three sources of the change in external wealth. Which one appears to be most important for Democracy? e. (4 marks) Suggest two measures to help Democracy correct the current account balance..

Education

India's balance of payments for the year ending March 2013 showed a current account deficit of $88.16 billion, or 4.2% of GDP. The trade deficit was $195.66 billion due to higher merchandise imports of $502.34 billion compared to exports of $306.58 billion. However, net invisibles earnings of $107.49 billion, including software exports of $64.92 billion and private transfers of $42.89 billion, partially offset the trade deficit. The average trade deficit was running at $16.31 billion per month. Exports of manufactured and engineering goods, which made up only 41% of total exports, need to increase by 15-20% annually to reduce the current

ACC 561 Wiley plus week 1 self study

Rogue Phoenix

This document contains 15 multiple choice questions that assess understanding of introductory accounting concepts. The questions cover topics such as forms of business organization, advantages of corporations, users of accounting information, the Sarbanes-Oxley Act, the three primary business activities, net income calculation, the four basic financial statements, and key elements of an annual report.

1.) You are working at an investment firm that has many invest.docx

elliotkimberlee

1.) You are working at an investment firm that has many investments in Lithuania. You have been asked to do a simple simulation showing the potential effects of Lithuania building a high-speed rail network, and what will happen if there is worldwide pressure on interest rates. All amounts are in millions of Litas. (The Lita is the Lithuanian currency. For this example use the exchange rate you compute, not the actual exchange rate). Government spending is projected to rise by 50 percent due to construction of the high-speed rail network This is the status quo scenario Total Output is equal to 5,000 Government spending is equal to 1,000 Tax revenue is equal to 1,000 Consumption is equal to 250+0.75*(Y-T); The level of investment is 1,000-50r; Net Exports are 500-500ε, the world real interest rate is five percent Assume that there are three political parties in Lithuania and each think that building the high speed rail network will have different effects on the economy. They have hired you as a consultant (moonlighting from your investment firm) to do an analysis showing what happens if their beliefs end up being true. a. THE LIBERAL PARTY believes that increasing government spending to build the high speed rail network will increase both G and GDP. That is G, will increase to 1,500 and GDP will increase by 500 too. Compare what happens to the economy if the Liberal party is correct. How do private savings, public savings, national savings, Net exports, and the exchange rate change from the status quo? (10 points) b. THE CONSERVATIVE PARTY believes that building a high speed rail network will put people to work (thus increasing G), but that it will ultimately be useless (there will be no overall wealth created), so GDP will be unchanged. The conservatives are also concerned that the government taking on new debt will be a bad sign to Lithuania’s creditors, and that borrowing the money for the high-speed rail system will cause the interest rate to rise 20 percent. Under this scenario, how do private savings, public savings, national savings, Net exports, and the exchange rate change from the status quo? (8 points) c. THE LIBERTARIAN PARTY believes that taking tax money and using it to build a high-speed rail network does nothing more than take money from one group of people (taxpayers) and give it to another group of people (the construction industry) and that there is no productive economic impact. How do private savings, public savings, national savings, Net exports, and the exchange rate change from the status quo? (8 points) d. Please compare situations a, b, and c. Who do you think is correct, and why? (8 points) e. The Libertarians use a microeconomics explanation about taxation to argue that the economy will be helped most by simply reducing taxes, even if people only save the money that they don’t spend on taxes (C is not affected). They say that this phenomenon is assumed away by most macro-economists. What are they .

Multinational Financial Management

Sandeep Patel

Bop

Shivali Kapoor

The document provides an overview of balance of payments accounts, including: - The balance of payments records a country's international transactions and is presented as double-entry bookkeeping. It includes the current account, capital account, and official reserve account. - The current account records trade in goods, services, investment income, and transfers. A deficit means imports exceed exports. - The capital account records cross-border investment and flows of assets. It includes foreign direct investment, portfolio investment, and other investments. - Together, the accounts must net to zero to balance according to the balance of payments identity. Surpluses and deficits impact currency valuation and the economy.

Acct504 final exam 100% correct answers

kjgjkgjg87987

Here are my evaluations of the internal control procedures: 1. Everyone has access to the petty cash fund. This is a weakness. The principle of segregation of duties is violated when everyone has access to the petty cash fund. A recommendation would be to assign one person as the custodian of the petty cash fund and require receipts for all disbursements. 2. Cash register codes are assigned to each cashier. This is a strength. The principle of accountability is upheld by assigning unique cash register codes to each cashier, allowing the business to track cash register activity to individual cashiers. 3. The treasurer is the only one allowed to sign checks. This is a

Balance of payment

Pawan Kawan

The document summarizes the significance of a country's balance of payments (BOP). It discusses how the BOP: 1) Provides detailed information about the supply and demand of a country's currency through trade statistics in the current account and capital flows. 2) Helps evaluate a country's economic performance in international trade. 3) Identifies appropriate trading partners and provides economic information about countries. The BOP is recorded using double-entry bookkeeping and composed of current, capital, and official reserve accounts. It impacts currency values, with current account deficits putting downward pressure and capital account surpluses creating upward pressure, and can result in BOP crises. Examples are provided.

Acct 504 final exam

scorpiosns123

This document provides a summary of an ACCT 504 final exam with multiple choice and problem-solving questions related to accounting concepts. The exam covers topics such as sole proprietorships, dividends, financial statements, ratios, cash flows, journal entries, and internal controls. Students are asked to calculate ratios, prepare financial statements, analyze internal controls, record journal entries, and indicate sections of the statement of cash flows.

This document appears to be a study guide for an ACCT 504 final exam. It contains 14 multiple choice questions covering various accounting concepts related to sole proprietorships, dividends, financial statements, inventory cost flow assumptions, bonds, cash flows, ratio analysis, and internal controls. The questions would help test a student's understanding of topics like the advantages of different business forms, the accounting equation, accrual accounting, inventory methods, bond issuance, and financial statement analysis techniques.

Acct 504 final exam

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Acct 504 final exam

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Module 41 capital flows and the balance of payments

American School of Guatemala

The document discusses balance of payments accounts, which track a country's international transactions. It has a current account for trade in goods/services and factor income, and a financial account for asset transactions. The current and financial accounts must sum to zero. Capital flows are determined by differences in investment opportunities (demand) and savings rates (supply) across countries, with funds flowing from low return to high return economies. However, two-way flows also occur for risk diversification and business strategy reasons.

Running Head Colombia’s Strategy and Performance.Colombia’s Str.docx

joellemurphey

Running Head: Colombia’s Strategy and Performance. Colombia’s Strategy and Performance 7 Colombia’s Strategy and Performance Student’s Name Institution Colombia’s Strategy and Performance Colombia is a country with an upper middle income. It’s Latin American fourth largest economy power. Petrol and its products is the country’s main export contributing to 45% of Colombia’s export. Manufacturing makes 12% of the export. The countries growth rate is over 10% each tear. Colombia’s information system is the fastest growing in the world with the country owns the longest fiber optic network in Latin America (Efe B, 2012). The country further has the largest ship building industry in the world. By 2015, Colombia became the fourth largest economy in Latin America. It’s ranked 31 worldwide. Since 1810, peso is the country’s currency. Its ISO4217 code is COP informally abbreviated as COL$. The official peso symbol is $. The exchange rate of peso to American dollar is 1:0.00040 In 2013, Colombians GDP was worth 378.15 billion US dollars. This represents 0.16 percent of the world’s economy. This according to statistics is the highest recorded value ever made in its history. Colombia GDP has continually increased with time as represented in Fig 1 below. Industry and agriculture in Colombia have greatly contributed to the gradual increase of GDP value: Manufacturing : Colombia has been manufacturing domestic appliances since 1903.however exportation of the appliances started in 1990’s.one of Colombia’s largest producers, HACEB, has been producing fridges since 1950 (Bushnell & Rex A,2010). Colombia also manufacture products for other companies E.g. whirlpool. This has placed Colombia as the third largest producer of electronic appliances in Latin America . Electronic manufacturing has also contributed to the new GDP value. Colombia is a major producer of electronics in the whole of Latin america.it is ranked as the second largest producer and exporter of electronic goods. In 2014; the government launched a national campaign to introduce and promote IT and electronics. Colombia has heavily invested in its infrastructure industry to promote trade within the country. The infrastructure sector has readily increased at a rate of 20% annually. The country has developed the “Fourth Generation Network” to enable them achieve their infrastructure target. The country aims at building a 7000 km road for the 2016-2020 periods. Further plans are being made to build national high speed train network. The agriculture sector has experienced some major drawbacks but it is steadily picking up. Its adverse climate and topography allows the cultivation of various crops. The hot regions readily support beef cattle rearing, cocoa growing among a few (Aguilera, 2011). The high temperature region, between 1000-2000m, allows coffee and maize farming ...

1. (TCO A) Which of the following distinguishes governmental.docx

dorishigh

1. (TCO A) Which of the following distinguishes governmental entities from nongovernmental not-for-profit organizations? The power to enact and enforce a tax levy. Absence of profit motive. Resource providers do not expect benefits proportional to the resources provided. Absence of a defined ownership interest that can be sold, transferred, or redeemed. 2. (TCO B)Expenditures are generally recorded and fund liabilities are recognized under which of the following? When goods and services are received, but only if resources are available in the fund. When purchases orders are issued, regardless of whether or not resources are available in the fund. When goods and services are received, regardless of whether or not resources are available in the fund. When the invoices are paid. 3. (TCO C) The general ledger journal entry in the General Fund to record actual expenditures and record the reversal of the associated encumbrance would include which of the following journal entry? A debit to the Encumbrance Account. A credit to the Encumbrance Account. A credit to Budgetary Fund Balance—Reserve for Encumbrance Account. A debit to the Accounts Payable account. 4. (TCO D) Which of the following is a true statement regarding the use of a Special Revenue Fund? (Points : 5) Special Revenue Funds may be used when a government wishes to segregate income for specific purposes. Special Revenue Funds may only be used when a substantial portion of the resources are provided by restricted or committed revenue sources. Assigned resources can be accounted for in a Special Revenue Fund. Once a Special Revenue Fund is established by the governmental entity, it will continue to be a Special Revenue Fund until all of the resources are exhausted. 5. (TCO B) Which of the following is not a true statement regarding the government-wide financial statements? (Points : 5) The government-wide financial statements are not required to present prior-year data. The government-wide financial statements include a Statement of Net Assets, Statement of Activities, and Statement of Cash Flows. The government-wide financial statements include capital assets, include infrastructure, and reflect depreciation, except for the infrastructure using the modified approach. All of the above are true. 6. (TCO D) A donor pledged $300,000 to thefund raising drive of a local government to assist its police officers in obtaining the latest technology. The pledge was made on July 17, 2011 but was conditioned on the government raising an additional $300,000 from other donors. By the fiscal year-end of June 30, 2012, the local government had raised only $6,000 from other donors. What entry would be made for the initial pledge by the local government during the year ended June 30, 2012? (Points : 5) Debit a receivable account and credit deferr ...

Macroeconomics ExamMust be typed and answers should be well .docx

infantsuk

Macroeconomics Exam Must be typed and answers should be well explained 1.) You are working at an investment firm that has many investments in Lithuania. You have been asked to do a simple simulation showing the potential effects of Lithuania building a high-speed rail network, and what will happen if there is worldwide pressure on interest rates. All amounts are in millions of Litas. (The Lita is the Lithuanian currency. For this example use the exchange rate you compute, not the actual exchange rate). Government spending is projected to rise by 50 percent due to construction of the high-speed rail network This is the status quo scenario Total Output is equal to 5,000 Government spending is equal to 1,000 Tax revenue is equal to 1,000 Consumption is equal to 250+0.75*(Y-T); The level of investment is 1,000-50r; Net Exports are 500-500ε, the world real interest rate is five percent Assume that there are three political parties in Lithuania and each think that building the high speed rail network will have different effects on the economy. They have hired you as a consultant (moonlighting from your investment firm) to do an analysis showing what happens if their beliefs end up being true. a. THE LIBERAL PARTY believes that increasing government spending to build the high speed rail network will increase both G and GDP. That is G, will increase to 1,500 and GDP will increase by 500 too. Compare what happens to the economy if the Liberal party is correct. How do private savings, public savings, national savings, Net exports, and the exchange rate change from the status quo? (10 points) b. THE CONSERVATIVE PARTY believes that building a high speed rail network will put people to work (thus increasing G), but that it will ultimately be useless (there will be no overall wealth created), so GDP will be unchanged. The conservatives are also concerned that the government taking on new debt will be a bad sign to Lithuania’s creditors, and that borrowing the money for the high-speed rail system will cause the interest rate to rise 20 percent. Under this scenario, how do private savings, public savings, national savings, Net exports, and the exchange rate change from the status quo? (8 points) c. THE LIBERTARIAN PARTY believes that taking tax money and using it to build a high-speed rail network does nothing more than take money from one group of people (taxpayers) and give it to another group of people (the construction industry) and that there is no productive economic impact. How do private savings, public savings, national savings, Net exports, and the exchange rate change from the status quo? (8 points) d. Please compare situations a, b, and c. Who do you think is correct, and why? (8 points) e. The Libertarians use a microeconomics explanation about taxation to argue that the economy will be helped most by simply reducing taxes, even if people only save the money that they don’t spend on taxes (C is not affected). They say that ...

(2-3)Income StatementMolteni Motors Inc. recently reported $6 mi.docx

mayank272369

(2-3)Income Statement Molteni Motors Inc. recently reported $6 million of net income. Its EBIT was $13 million, and its tax rate was 40%. What was its interest expense? (Hint: Write out the headings for an income statement, and then fill in the known values. Then divide $6 million net income by 1 − T = 0.6 to find the pre-tax income. The difference between EBIT and taxable income must be the interest expense. Use this procedure to work some of the other problems.) (2-5)Net Cash Flow Kendall Corners Inc. recently reported net income of $3.1 million and depreciation of $500,000. What was its net cash flow? Assume it had no amortization expense. (2-6) Statement of Retained Earnings In its most recent financial statements, Del-Castillo Inc. reported $70 million of net income and $900 million of retained earnings. The previous retained earnings were $855 million. How much in dividends did the firm pay to shareholders during the year? (3-2) Debt Ratio Vigo Vacations has $200 million in total assets, $5 million in notes payable, and $25 million in long-term debt. What is the debt ratio? (3-4) Price/Earnings Ratio Reno Revolvers has an EPS of $1.50, a cash flow per share of $3.00, and a price/cash flow ratio of 8.0. What is its P/E ratio? (3-5) ROE Needham Pharmaceuticals has a profit margin of 3% and an equity multiplier of 2.0. Its sales are $100 million and it has total assets of $50 million. What is its ROE? (3-8) Profit Margin and Debt Ratio Assume you are given the following relationships for the Haslam Corporation: Sales/total assets 1.2 Return on assets (ROA) 4% Return on equity (ROE) 7% Calculate Haslam’s profit margin and liabilities-to-assets ratio. Suppose half its liabilities are in the form of debt. Calculate the debt-to-assets ratio. (3-9) Current and Quick Ratios The Nelson Company has $1,312,500 in current assets and $525,000 in current liabilities. Its initial inventory level is $375,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson’s short-term debt (notes payable) increase without pushing its current ratio below 2.0? What will be the firm’s quick ratio after Nelson has raised the maximum amount of short-term funds? (3-10) Times-Interest-Earned Ratio The Morris Corporation has $600,000 of debt outstanding, and it pays an interest rate of 8% annually. Morris’s annual sales are $3 million, its average tax rate is 40%, and its net profit margin on sales is 3%. If the company does not maintain a TIE ratio of at least 5 to 1, then its bank will refuse to renew the loan and bankruptcy will result. What is Morris’s TIE ratio? (4-6) Future Value: Ordinary Annuity versus Annuity Due What is the future value of a 7%, 5-year ordinary annuity that pays $300 each year? If this were an annuity due, what would its future value be? (4-10) Present and Future, Values of Single Cash, Flows for Different, Interest Rates What is the future v ...

1. (TCO B) Which of the following is not a true statement .docx

dorishigh

1. (TCO B) Which of the following is not a true statement regarding the government-wide financial statements? (Points : 5) The government-wide financial statements are not required to present prior-year data. The government-wide financial statements include a Statement of Net Assets, Statement of Activities, and Statement of Cash Flows. The government-wide financial statements include capital assets, include infrastructure, and reflect depreciation, except for the infrastructure using the modified approach. All of the above are true. 2. (TCO D) A donor pledged $300,000 to thefund raising drive of a local government to assist its police officers in obtaining the latest technology. The pledge was made on July 17, 2011 but was conditioned on the government raising an additional $300,000 from other donors. By the fiscal year-end of June 30, 2012, the local government had raised only $6,000 from other donors. What entry would be made for the initial pledge by the local government during the year ended June 30, 2012? (Points : 5) Debit a receivable account and credit deferred revenues, a liability account. No entry is required. Debit a receivable account and credit the Fund Balance account. Debit a receivable account and credit a revenue account. 3. (TCO D) The City of Davenport adopted the following budget for fiscal year 2012: Anticipated Revenues: Property Taxes $5,340,000 Licenses and Permits 523,000 Fines and Forfeits 425,000Total $6,288,000 Approved Expenditures: General Government $2,160,000 Public Safety 2,450,000 Public Works 1,560,000 Total $6,170,000 In addition, the City reported the following actual amounts for the same fiscal year: Revenues: Property Taxes $5,375,000 Licenses and Permits 519,000 Fines and Forfeits 437,000 Total $6,331,000 Expenditures-Current Year: General Government 2,175,000 Public Safety ...

India's balance of payments

Nishant Pahad

The document discusses India's balance of payments position in 2013. It provides definitions and explanations of key terms like balance of payments, current account, and capital account. India had a current account deficit of $88.16 billion in 2013, which was 4.2% of GDP. The trade deficit was $195.66 billion due to higher imports, especially of oil. Software exports and private transfers helped offset this deficit. Foreign direct investment and portfolio investment contributed to the capital account surplus of $88.16 billion, balancing out the current account deficit. However, more policy measures were needed to attract long term funds and improve the external accounts position.

Balance of payment

Yagnesh sondarva

This document discusses India's balance of payments. It begins by defining the balance of payments as a systematic record of all economic transactions between residents of a country and the rest of the world. It then explains the importance of the balance of payments for understanding currency demand and supply, exchange rates, and monetary policy shifts. The document outlines the key components of a balance of payments statement, including the current account, capital account, and errors and omissions. It also discusses accounting treatments for balance of payments surpluses and deficits and the effects of disequilibriums on the economy. In less than 3 sentences.

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The document provides an analysis of the fiscal health of the 75 most populous U.S. cities based on their fiscal year 2018 financial reports. It finds that 63 cities had more debt than money to pay all bills, with a total unfunded debt of $323.2 billion. Unfunded retirement benefits, including $176.2 billion in pension debt and $149.8 billion in other post-employment benefits, were major contributors to the debt. The report ranks the cities based on their "Taxpayer Burden" or "Taxpayer Surplus" and assigns grades based on their financial condition. No cities received an A, 12 received a B, 27 a C, 32 a D, and 4 an F.

Managing Government Balance Sheet: a Focus on Public Assets - Manal Fouad, IMF

OECD Governance

BALANCE OF PAYMENTInternational flow of goods & services & coping with curren...

Hilal Ahmad

The document discusses balance of payments categories and the international flow of goods, services, and capital. It describes how the current account, capital account, and official reserves account relate through double-entry bookkeeping. It also explains the linkages between domestic savings and investment, and the current and capital accounts. The document considers possible solutions for coping with a current account deficit, finding that currency depreciation and protectionism are generally ineffective, while stimulating national saving may help address imbalances.

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ahakizamungu

This document summarizes a working paper that estimates capital flight from developing countries from 1971-1998 using multiple methods. It acknowledges that while capital flight is assumed to be prevalent, estimation methods may not fully capture capital fleeing due to economic and political instability. The paper evaluates different estimation methods and definitions of capital flight used in literature. Estimates of capital flight, resident outflows, misinvoicing, and hot money flows are presented for regions and time periods. The estimates reveal high resident outflows from some countries and regions even in the 1990s, and that capital leaves countries with both liberalized and controlled capital accounts. Outflows have been large recently from East Asia, Europe, Central Asia and Latin America. The paper provides a

planning and budgeting is a way to set budgeting planning to spending coverin...

MengsongNguon

This document provides an overview of key concepts in planning and budgeting. It discusses how budgets are used to manage resources and cash flows. It also explains the importance of participative budgeting that involves input from employees. The document outlines various steps in budgeting like sales forecasting, production budgeting, developing cash budgets and budgeted financial statements. It discusses budgeting challenges in service organizations and the need for sensitivity analysis to account for uncertainty. Ethical issues that can arise from budgets and performance evaluation are also covered.

External wealth and the long run budget constraint

Asusena Tártaros

1) The document discusses external wealth and a country's long-run budget constraint. It defines external wealth as the net assets a country owns abroad minus the foreign assets owned within the country. 2) A country's change in external wealth equals its current account balance plus net factor income from abroad plus capital gains or losses. In the long run, for a small open economy, external wealth must equal zero if all debts are to be paid off. 3) The document provides a two-period example of a country's budget constraint. It shows that a creditor country with positive initial wealth can run trade deficits on average in the future, while a debtor country must run trade surpluses on average.

How might taxonomic resolution how precisely we identify or.pdf

HOW TO DO 2 20 marks The balance of payments accounts of.pdf

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