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On December 31, a country has the following stocks of international assets and liabilities to foreigners. The countrys residents own $30billion of bonds issued by
On December 31, a country has the following stocks of international assets and liabilities to foreigners. The countrys residents own $30billion of bonds issued by foreign governments. The countrys central bank holds $20 billion of gold and $15 billion of foreign-currency assets as official reserve assets. Foreign firms have invested in production facilities in the country, with the value of their investments currently $40billion. Residents of foreign countries own $25billion of bonds issued by the countrys companies. (1) What is the value of the countrys international investment position? Is the country an international creditor or debtor? (2) If the country during the next year runs a surplus in its current account, what will the impact be on the value of the countrys international investment position?
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