X hits on this document

131 views

0 shares

0 downloads

0 comments

13 / 46

Licensed to:

Contents

xi

PART 2: International Monetary Relations

341

CHAPTER 10 The Balance of Payments ................................................................. 343

Double-Entry Accounting ........................... 343 International Payments Process ............... 345 Balance-of-Payments Structure ..................... 346

Is a Current Account Deficit a Problem? ..... 356

Business Cycles, Economic Growth, and the Current Account ........................ 357

Current Account ................................... 346 Capital and Financial Account ................. 347

Economic Downturn of 20072009: Effect on Foreign Investment in the United States ............................... 358

Statistical Discrepancy: Errors and Omissions ...................................... 349

U.S. Balance of Payments ........................... 350

The Paradox of Capital Flows from Developing to Industrial Countries ............................................. 352

What Does a Current Account Deficit (Surplus) Mean? ....................................... 354

Net Foreign Investment and the Current Account Balance ................................... 354

Impact of Capital Flows on the Current Account ................................... 355

How the United States Has Borrowed at Very Low Cost .................................. 359

Do Current Account Deficits Cost Americans Jobs? .................................... 360

Can the United States Continue to Run Current Account Deficits Indefinitely? ........ 361

Balance of International Indebtedness ............ 363

United States as a Debtor Nation .............. 365 Summary ................................................ 365 Key Concepts & Terms .............................. 366 Study Questions ....................................... 366

CHAPTER 11

Foreign Exchange ........................................................................... 369

Foreign-Exchange Market ...........................

369

Types of Foreign-Exchange Transactions ............................................

Interbank Trading ..................................... Reading Foreign-Exchange Quotations ........... Forward and Futures Markets ...................... Foreign-Currency Options .......................... Exchange-Rate Determination ......................

Demand for Foreign Exchange ..................

371 373 375 377 379 380 380

Weak Dollar Is a Bonanza for European Tourists ................................. 381

Supply of Foreign Exchange ..................... 381 Equilibrium Rate of Exchange .................. 382

Indexes of the Foreign-Exchange Value of the Dollar: Nominal and Real Exchange Rates ........................................ 383

Arbitrage ................................................ 385 The Forward Market ................................. 387 The Forward Rate ................................. 387

Relation Between the Forward Rate and Spot Rate ...................................... 388

Managing Your Foreign Exchange Risk: Forward Foreign-Exchange Contract .......... 389

How Markel Rides Foreign-Exchange Fluctuations ......................................... 391

Volkswagen Hedges Against Foreign-Exchange Risk ............................ 392

Does Foreign-Currency Hedging Pay Off? .............................................. 392

Exchange-Rate Risk: The Hazard of Investing Abroad .................................. 394

Interest Arbitrage ...................................... 394

Copyright 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

Document info
Document views131
Page views131
Page last viewedSat Dec 10 15:09:31 UTC 2016
Pages46
Paragraphs2598
Words25948

Comments