GBM 381 Week 3 Individual Assignment
This pack of GBM 381 Week 3 Individual Assignment Chapter 10, 15, includes:
1. Indicate how each of the following international transactions is entered into the U.S. balance of payments with double-entry bookkeeping:
(a) A U.S. resident imports $500 worth of merchandise from a U.K. resident and agrees to pay in three months.
(b) After the three months, the U.S. resident pays for his imports by drawing down his bank balances in London.
(c) What is the net effect of transactions (a) and (b) on the U.S. balance of payments? If they occur during the same year?
(c) What is the net effect of transactions (a) and (b) on the U.S. balance of payments if they occur during the same year?
1. (a) What are the alleged advantages of a fixed over a flexible exchange rate system? How do advocates of flexible exchange rates respond?
(b) What overall conclusion can be reached on whether flexible or fixed exchange rates are preferred?
What is meant by a crawling peg system? How can such a system overcome the disadvantage of an adjustable peg system?