bop
DESCRIPTION
ekonomi internasionalTRANSCRIPT
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THE BALANCE OF PAYMENTS AND INTERNATIONAL ECONOMIC LINKAGESThe balance of payments summarizes a nations international economic transactions.
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Balance of payments accounting is based on double-entry bookkeeping.
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Increases (decreases) in foreign currency assets show up as debits (credits) on the balance of payments.
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The current-account balance reflects the net flow of goods, services, and gifts.
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The capital account shows public and private lending and investment activities.
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The official reserves account shows the net deficit or surplus on a nations combined current and capital accounts.
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Basic macroeconomic accounting identities link domestic spending and production to the current-account and capital-account balances.
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A nation whose income exceeds its spending will have a domestic savings surplus that must be invested abroad.
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A nation that produces more (less) than it spends will have a net capital outflow (inflow)
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The current-account balance must equal the net capital outflow.
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Japan is using its large current-account surplus to invest in the United States.
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To improve the current-account balance, domestic savings must be increased relative to domestic investment.
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Current-account deficits (surpluses) are not necessarily signs of economic weakness (strength).
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A government budget deficit will worsen a nations current-account deficit.
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The U.S. current account deficit during the 1980s was closely related to the federal deficit.
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One proposed solution to the U.S. current-account deficit is to devalue the dollar and make U.S. goods more competitive.
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Historical experience indicates that currency devaluation will not cure a trade deficit.
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J-curve theory predicts that currency devaluation will initially worsen and then improve a nations trade deficit.
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Instead of one causing the other the strong dollar and the trade deficit may both have resulted from foreign demand for U.S. assets.
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The price of the dollar determines the terms on which the rest of the world is willing to finance the U.S. budget deficit.
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Protectionism is likely to reduce both imports and exports by the same amount, leaving the trade deficit unchanged.
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Ending foreign ownership of domestic assets would eliminate a trade deficit but slow economic growth.
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One way to reduce the trade deficit is to boost the national savings rate.
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The large U.S. trade deficits during the 1980s and 1990s do not appear to have harmed U.S. economics performance.
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Trade deficits, by themselves, are neither good nor bad, as shown by the experience of United States.
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The U.S. current-account deficit reflects national preferences for consumption, savings, and investment to which trade flows have adjusted in a timely manner.