Suppose that, in a given year, Brazil performed the following foreign transactions: 1. A consortium of American
Question:
Suppose that, in a given year, Brazil performed the following foreign transactions:
1. A consortium of American banks lends PetrobrĂ¡s US$50 million.
2. Brazil sends US$20 million in humanitarian aid to Somalia.
3. The Brazil Central Bank authorizes interest payments of US$10 million to an American bank. At the same time, it is able to refinance interest payments of US$20 million due this year.
4. Brazilian workers living in the United States send the equivalent of US$100 million to their families living in Brazil.
5. Brazil imports oil from Iran for the amount of US$500 million, paid in cash.
6. A Brazilian company invests the equivalent of US$20 million to build a factory in Argentina.
7. A Spanish tour agency pays a Brazilian hotel chain US$10 million for lodging services provided to Spanish tourists.
8. A German automobile manufacturer purchases a shipment of steel from Brazil for the FOB amount of US$200 million.
9. The subsidiary of a French company invests the equivalent of US$50 million in Brazil.
Present the balance of payments, highlighting:
a. The trade surplus or deficit
b. The financial account balance
c. The net income sent abroad
d. The variation in reserve assets for the period
Step by Step Answer:
Principles Of International Finance And Open Economy Macroeconomics Theories Applications And Policies
ISBN: 9780128022979
1st Edition
Authors: Cristina Terra