Unit 6
Suppose that the exchange rate between the United States dollar ($) and the Thai currency, baht (฿), is ฿1=$0.05. Leticia wants to buy a ฿600 souvenir from Thailand. What is the souvenir's price in dollars?
$30 (the souvenir's price in baht ×× the exchange rate ($/฿)
Which of the following transactions is recorded as a credit entry in the country's current account?
Exports of consumer goods
Which of the following is recorded in a country's balance of payments accounts?
Financial capital flows between the country and the rest of the world
Current account balance
The current account balance is the sum of net exports (exports − imports), net income from abroad, and net unilateral transfers
the government of a country imposes a tariff on its imports of foreign goods
The supply of the currency will decrease and the currency will appreciate.