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    Merchandise trade - International Financial Statistics

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    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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    Solution Preview

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

    US. We look at the Goods exports, Goods imports and Trade balance accounts. The biggest numbers there (absolute values) indicate that the trade plays the most important role.

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

    Net importers: China, Canada, Italy, Russian Federation
    Net exporters: Israel, Japan, USA

    To determine this, we look at the Services Credit and Debit fields. If Credit is greater that Debit (absolute value), then the country is a Net exporter, otherwise Net importer.

    3. Which ...

    Solution Summary

    Merchandise trade is exemplified.