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

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Presentation on theme: "Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. CHAPTER 14 Balance of Payments Fundamentals."— Presentation transcript:

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

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

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

4 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

5 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

6 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

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

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

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

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

11 Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit 14-10 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,’’ http://research.stlouisfed.org/fred2/categories/13 (accessed January 27, 2006).

12 Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit 14-11 Mexican Balance of Payments, 1992–1996 Source: IMF, International Financial Statistics Online, http://ifs.apdi.net/imf/about.asp (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.

13 Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit 14-12 Mexican Economic Conditions, 1989–1995 Source: IMF, International Financial Statistics Online, http://ifs.apdi.net/imf/about.asp (accessed January 23, 2006). *Source: World Bank, ‘‘World Development Indicators,’’ http://web.worldbank.org/WBSITE/EXTERNAL/ DATASTATISTICS/0,,contentMDK:20535285~menuPK:232599~pagePK:64133150~piPK:64133175~the SitePK:239419,00.html (accessed February 6, 2006).

14 Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit 14-13 Balance on Goods and Services Source: IMF, International Financial Statistics Online, http://ifs.apdi.net/imf/about.asp (accessed September 27, 2006).

15 Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit 14-14 Components of GDP: Aggregate Demand Perspective

16 Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit 14-15 Components of GDP: Income Perspective

17 Copyright© 2008 South-Western, a part of Cengage Learning. All rights reserved. Exhibit 14-16 Condition 3: NE  (S – I) + (T – G)

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


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