Explain that the u.s. imports more than it exports, Financial Management

Assignment Help:

Comment on the subsequent statement: “Since the U.S. imports more than it exports, it is essential for the U.S. to import capital from foreign countries to finance its current account deficits.”

Answer:  The statement assumes that the U.S. current account deficit causes its capital account surplus. Actually, the causality may be running in the reverse direction: U.S. capital account surplus may result the country’s current account deficit. Suppose foreigners find out the U.S. a great place to invest and send their capital to the U.S., resultant in U.S. capital account surplus. This type of capital inflow will strengthen the dollar, hurting the United States export and encouraging imports from foreign countries, resulting current account deficits.


Related Discussions:- Explain that the u.s. imports more than it exports

Accounting system, Accounting System: The accounting systems are the pr...

Accounting System: The accounting systems are the primary financial systems that any business should have in place to ensure accurate and usable financial information. The b

FINA310-1203B-10 Financial Management, FINA310-1203B-10 Financial Managemen...

FINA310-1203B-10 Financial Management Assignment Name: Unit 2 Discussion Board Deliverable Length: 3-5 paragraphs Details: The Discussion Board (DB) is part of the core of online l

Define ‘trust''. explain in detail the various types of trust, Question 1 ...

Question 1 Define 'Trust'. Explain in detail the various types of Trust Question 2 Discuss the concept of Tax Planning. Identify difference between Tax Planning and Tax Ev

Sources of funds, What are sources of funds for an assignment?

What are sources of funds for an assignment?

Forward market evaluation, Forward market evaluation Net receipt in 1 m...

Forward market evaluation Net receipt in 1 month = 240000 - 140000 = $100000 Nedwen Co requires to sell dollars at an exchange rate of 1.7829 + 0.003 = $1.7832 per £ Ster

Sources of finance, Classification of finance and abrief description of eac...

Classification of finance and abrief description of each source of fund

Strategic management, Develop and implement strategic plan using bounce fit...

Develop and implement strategic plan using bounce fitness as case study

Capital management., explain the concept of working capital management?

explain the concept of working capital management?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd