QUESTION 9 All else being equal, an increase a country\'s national income tends

Question

QUESTION 9 All else being equal, an increase a country's national income tends to decrease its balance of trade. O True O False QUESTION 10 Transactions between Great Britian and the rest of the world are shown below. Use the following information to answer the next two questions A. British companies sell 25 million pounds worth of bonds to foreigners. B. British government sells 20 million pounds of treasury securities to foreigners C. British citizens receive 3 million pounds in interest from foreign investments D. British companies buy 80 million pounds worth of American produced steel E. GlaxoSmithKline (British firm) sells 45 million pounds of pharmaceutical drugs abroad. F. British government buys 3 million pounds of gold in FX market. G. British bankers invest 10 million pounds in foreign banks. Find Great Britian's balance of trade. Enter your answer in terms of millions of pounds. Do not use the pound sign or any other non-numerical value when inputting your answer QUESTION 11 Find Britian's official reserve account balance (in millions of pounds). 0-3 0 17 0-23

Explanation / Answer

9.True

Balance of Trade of a country = Imports-Exports

Increase in National Income imples imcrease in exports and hence a decrese in Balance of Trade

10.Balance Of Trade = Imports - Exports

=80-45

=45

Other transactions have not been included since those are neither exports nor imports

11.Official Reserve Account Balance = -25-20-3+80-45+3+10

= 0

All transactions affect the reserves of the country, hence included.

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