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International Finance - Capital Accounts

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What are the components of the capital account in the balance of payments? What are the components of the current account in the balance of payments? Suppose you know that a certain country has a surplus on the capital account on its balance of payments; what does this imply about the current account? What does a surplus in the capital account mean?

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What are the components of the capital account in the balance of payments? What are the components of the current account in the balance of payments?

First of all balance of payments is simply the summary of transactions between domestic and foreign residents for a specific country over a specified period of time. In the balance of ...

Solution Summary

Surplus in capital accounting is discussed. The current account of the balance payments are discovered.

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Merchandise trade - International Financial Statistics

Answer to the question can be found in the attached data sheets which is the balance of payments data from the IMF's International Financial Statistics Yearbook. GDP and population data are given at the bottom of this page. No additional sources need to the consulted in preparing this assignment. You should explain which data items you are using to answer each question.

1. Merchandise trade plays the most important role in which country?

2. Are the countries net importers or net exporters of services?

3. Which economies earn more from their overseas investments than they pay out to foreign owners (investors) from local earnings?

4. Which countries are usually net savers and which are net investors based on an interpretation of the current account?

5. What types of overseas investments does the country your group is working on typically make? Does any other country we are looking at seem to have a similar pattern? Why do you think so?

6. What categories of investments seem to attract foreign interest in your case-study country? Which of the other countries we are looking at seems to be the least similar to yours on this point? Explain your answer?

7. Which countries normally have to draw down reserves to settle their accounts with the rest of the world?

Canada --- GDP = $714 billion; pop. 31.3 million

China --- GDP = $1,266 billion; pop. 1294.4 million

Israel --- GDP = $103.7 billion; pop. 6.3 million

Italy --- GDP = $1,184 billion; pop. 57.4 million

Japan --- GDP = $3,993 billion; pop. 127.5 million

Russia --- GDP = $346.5 billion; pop. 143.8 million

United States --- GDP = $10,383 billion; pop. 288.5 million

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