Savings and Investment in the Open Economy
1. Now assume that the economy is open and that the world interest rate is determined on the world market instead of in the domestic economy. Use a two-country model with initial current accounts equal to zero. Use world saving - investment diagrams to answer the questions below.
a. How does an increase in domestic wealth affect the world equilibrium interest rate and the domestic current account?
b. How does an equal increase in current domestic taxes and government spending affect the world equilibrium interest rate and the domestic current account?
c. How does an increase in domestic total factor productivity affect the world equilibrium interest rate and the domestic current account?
2. Now turn to consider a small open economy. How does each of the shocks above affect the domestic current account? Your answer will have three savings investment graphs, one for each shock above.
2-a. Enter the transactions In a sales journal. 2-b. Enter the transactions In a purchases journal. 2-c. Enter the transactions In a cash receipts Journal. 2-d. Enter the transactions In a cash disbursements Journal. 2-e. Enter the transactions In a general Journal. Complete this question by entering your answers in the tabs below. Req 2A Req 28 Req 2C Req 2D Req 2E Enter the transactions in a sales journal. SALES JOURNAL Accounts Cost of Goods Date Account Debited Invoice Receivable Dr. Sold Or. Number Sales Cr. Inventory Cr. Reg 28 > be here to searchQuestion about M1 and M2 money supplies. Which of the following is true? There could be more than one correct answer. C] lfJim withdraws some money from his checking account and holds it in his pocket [as currency], M1 will decrease but M2 will remain the same, C] lfJim withdraws some money from his saving account and holds it in his pocket {as currency). M1 will increase but M2 will remain the same. [:] If Melissa transfers some money from her checking account to her savings account, M1 will decrease and M2 will increase. [:] Karen opens a time deposit account and transfers $50,000 from her savings account to this new time deposit account. As a result, M1 remains the same but M2 increases. C] Karen opens a time deposit account and transfers $150,000 from her savings account to this new time deposit account. As a result, M1 remains the same but M2 decreases. QUESTION 13 A list of all accounts and their balances after posting closing entries is referred to as: O A trial balance. O An adjusted trial balance. O A post-closing trial balance. An accounting trial balance. QUESTION 14 A list of all accounts and their balances after updating account balances for adjusting entries is referred to as: O A trial balance. O An adjusted trial balance. O A post-closing trial balance. O An accounting trial balance. QUESTION 15 A post-closing trial balance: Is a list of all accounts and their balances after adjusting entries. Is a list of all accounts and their balances before adjusting entries. Is a list of all accounts and their balances after closing entries. O Is a trial balance adjusted for cash-basis accounting.Question 77 Which of the following BEST explains this graph? Risk to Exporter B C Risk to Importer A: Cash in advance, B: Open account, C: Documents against payment A: Open account, B: Cash in advance, C: Documents against payment A: Documents against payment, B: Cash in advance, C: Open account A: Cash in advance, B: Documents against payment, C: Open account A: Open account, B: Documents against payment, C: Cash in advance. Transactions are entered in the trial balance and then transferred to journals. O True False Question 2 (1 point) Saved If a journal entry is posted twice, then this error will be found when the trial balance is produced. . True O False Question 3 (1 point) A chart of accounts should be arranged in alphabetical order for easier reference. True False
