托马斯国际金融课后习题答案.pdf

Suggestedanswerstoquestionsandproblems

(inthetextbook)

Chapter2

2.Disagree,atleastasageneralstatement.Onemeaningofacurrentaccountsurplusisthatthe

countryisexportingmoregoodsandservicesthanitisimporting.Onemighteasilyjudge

thatthisisnotgood—thecountryisproducinggoodsandservicesthatareexported,butthe

countryisnotatthesametimegettingtheimportsofgoodsandservicesthatwouldallowit

domoreconsumptionanddomesticinvestment.Inthiswayacurrentaccountdeficitmightbe

consideredgoodtheextraimportsallowthecountrytoconsumeandinvestdomestically

morethanthevalueofitscurrentproduction.Anothermeaningofacurrentaccountsurplus

isthatthecountryisengaginginforeignfinancialinvestment—itisbuildingupitsclaimson

foreigners,andthisaddstonationalwealth.Thissoundsgood,butasnotedaboveitcomesat

thecostofforegoingcurrentdomesticpurchasesofgoodsandservices.Acurrentaccount

deficitisthecountryrunningdownitsclaimsonforeignersorincreasingitsindebtednessto

foreigners.Thissoundsbad,butitcomeswiththebenefitofhigherlevelsofcurrentdomestic

expenditure.Differentcountriesatdifferenttimesmayweighthebalanceofthesecostsand

benefitsdifferently,sothatwecannotsimplysaythatacurrentaccountsurplusisbetterthan

acurrentaccountdeficit.

4.Disagree.Ifthecountryhasasurplus(apositivevalue)foritsofficialsettlementsbalance,

thenthevalueforitsofficialreservesbalancemustbeanegativevalueofthesameamount

(sothatthetwoaddtozero).Anegativevalueforthisassetitemmeansthatfundsare

flowingoutinorderforthecountrytoacquire