Ch. 38 Assignment Due Wed. 4/21 and Thurs. 4/23

Due Tues 4/21.


1.  What is a nation's Balance of Payments?  What three accounts make up the balance of payments?


2.  Define the current account and describe the types of transactions included in it.


3.  Define the capital account and describe the types of transactions included in it.


4.  Define the official reserves account and describe the types of transactions included in it.


5.  If a nation has a deficit in the capital account, what must be true of the current account?  Explain.






Due Thurs. 4/23


1.  Consider the definitions of a flexible and fixed exchange rate systems.  Which currency valuation system do we have in the US?  How do you know?


2.  Define currency appreciation.  Define currency depreciation.


3.  Create a chart for all of the factors impacting currency value.  The chart should indicate the name of the factor, how this factor may cause appreciation, and how it may cause depreciation.