QUESTION 50 The following information holds for the next two problems: Suppose the following information is available for a country in a given year, S (Private Savings) I (Private Domestic Investment) G (Government Spending) T (Tax Revenues) How much is the budget deficit of the country? $-500 billion O $-300 billion $300 billion $500 billion O $700 billion Billions of US dollars $1400 $800 $800 $500 QUESTION 51 The following table summarizes a country's balance of payments. Is this country experiencing a net capital inflow or outflow? By how much? Billions of US dollars Current account balance Capital account balance Financial account balance Net errors and omissions Reserves and related items outflow by $395 outflow by $375 outflow by $25 inflow by $25 inflow by $375 QUESTION 52 How much is the current account balance of the country? O $-500 billion $-300 billion O $300 billion $500 billion $700 billion -400 5 370 5 20 QUESTION 53 Suppose that the annual interest rate is 5% in the US and 2% in Germany, and that the spot exchange rate is $1.2/euro and the forward exchange rate, with one-year maturity, is $1.3/euro. If an equilibrium with no arbitrage opportunities is to be restored, what should be the US interest rate? (Assume all the other numbers remain the same.) 6.33% 7.25% 8.59% 10.50% O 12.23% QUESTION 54 If the annual interest rate is 4% in the US and 6% in Germany, then $ is expected to against euro by. %. O appreciate, 2% O appreciate, 3% O appreciate, 4% depreciate, 2% E)depreciate, 3% QUESTION 55 Suppose that a Big Mac costs $2.5 in the US and 275 yen in Japan today. If the actual exchange rate is yen105/$ in the market. How much is the Big Mac PPP exchange rate? OV100/$ 107/$ O 110.5/$ 110/$ O 115/$