Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. CHAPTER 14 Balance of Payments Fundamentals.

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Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. CHAPTER 14 Balance of Payments Fundamentals

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit 14-1 Balance of Payments*

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit 14-2 Effect of Increasing Reserve Assets on the Monetary Base

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit 14-3 Effect of Federal Reserve Intervention in the Euro–Dollar Foreign Exchange Market to Raise the Dollar’s Value

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit 14-4 Sources and Uses of Funds in the Balance of Payments

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit 14-5 Sources and Uses of Funds in the Balance of Payments

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit 14-6 Balance of Payments Identity

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit 14-7 Major Balance of Payments Measures

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit 14-8 Components of Gross Domestic Product

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit 14-9 Components of Gross National Product

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit U.S. Current Account and Net Capital Inflows, 1975–1991 Source: Federal Reserve Bank of St. Louis, Economic Data—FRED II, ‘‘U.S. Trade and International Transactions,’’ (accessed January 27, 2006).

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit Mexican Balance of Payments, 1992–1996 Source: IMF, International Financial Statistics Online, (accessed January 23, 2006). *f.o.b. means ‘‘free on board.’’ It is the value of the exported goods at the border of the exporting country. For traded goods, it excludes freight costs and insurance beyond the border of the exporting country.

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit Mexican Economic Conditions, 1989–1995 Source: IMF, International Financial Statistics Online, (accessed January 23, 2006). *Source: World Bank, ‘‘World Development Indicators,’’ DATASTATISTICS/0,,contentMDK: ~menuPK:232599~pagePK: ~piPK: ~the SitePK:239419,00.html (accessed February 6, 2006).

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit Balance on Goods and Services Source: IMF, International Financial Statistics Online, (accessed September 27, 2006).

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit Components of GDP: Aggregate Demand Perspective

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit Components of GDP: Income Perspective

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit Condition 3: NE  (S – I) + (T – G)

Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Economic Information for Switzerland, 2001–2005