Essays on Trade Balance

INVESTMENT ANALYSIS OF VIETNAM

INVESTMENT ANALYSIS OF VIETNAM

Summary

Vietnam has changed in the last thirty years from an agrarian country to a service and manufacture country leader in the world in growth and economic activity. The country has a communist system legally but, in the practice, the country has a liberal policy in the economy signing the Trans-Pacific Free Trade Agreement but maintaining the political control under the rule of one party. The country offers opportunities and risks for individual and corporation with the intention to invest.

Introduction

Vietnam is known in the world as the country where United States of America lost a ...

The concept of comparative advantage states that the country that is capable of producing a good at a lower opportunity cost in comparison to some other country, then it has a comparative advantage in producing that particular good. If a country is capable of producing a good or a service at a lower cost as compared to any other country than it is said to have an absolute advantage in that particular good or service. The United States have been known to be an importer of coffee beans and tea. This is mainly because there is demand for tea ...

Introduction

Governments and nonprofit organizations just like the commercial entities must prepare financial statements, but unlike the commercial entities whose accounting is for measuring profitability, the governments’ and nonprofit organizations’ accounting is for accountability (City of Cambridge Participatory Budgeting, 2016). The nonprofit and government agencies apply an accounting system known as fund accounting, where a fund is made up of several accounts each set apart for a particular purpose in agreement with law and regulations. Unlike the commercial entities which only have a single account called the general ledger for determination of profits, nonprofit and government agencies can have several ...

There are two important economic indicators to analyze the economy of a country:

■ Trade balance (exports and imports surplus or deficit): This indicator reflects the current situation of the real economy. The import and export relation says about the strength and dynamism of the economy. The absolute values both exports and imports affect the Gross Domestic Product, the employment generation and the relation between the national and international currencies . ■ Future potential of country resources and growth: this indicator says the potential of the economy in the future, both physical and intangible resources that the country will use for development. The physical resources are oil, natural gas and metals reserves, installed capacity ...

There are different approaches to define small economies. Besides usual quantitative ways to measure country’s smallness by its population, territory, GDP and other criteria, there some qualitative factors that are used to define the economy’s scale. Some economists state that small economies are those that adopt “price taking” policies as they cannot dictate their rules in the market, neither significantly influence trade rules. This peculiarity of small economies mainly lies in the fact that such countries have limited resources. Hereby, small countries are more dependent on imports and are forced to accept trade agreements offered by large ...

Question A

According to Gregory Mankiw (2011), trade balance reflects the difference between net worth of exports and imports in a given country. Consequently, positive trade balance suggests in monetary value country exports more than it imports, while negative trading balance (trade deficit) is associated with dominance of imports over exports. Economists argue that trade deficit is not always considered to have a negative impact on the national economy, however it often creates potential risks which may result in harsh economic consequences if they are not addressed properly. For example, if net exports are negative it is assumed that proceedings from exports are ...

Turkmenistan’s international trade

When taking into consideration of Turkmenistan’s international trade for the last few decades, it has sought to improve its sovereignty by extensively getting only bilateral trade agreements. It is advocated that the country's prospective prosperity is dependent based on its actual ability to facilitate peace and stability in a probably volatile region. Based on that aspect, its international relations in relation to the essence of trade are articulated within previous Soviet territories that come from the central Asia and Russia. These intricate its assumption while focusing to cultivate emerging relations countries such as America, Asia and Europe, and America. ...

1 If there is no discretionary increase in government spending then the business cycle will affect the size of the budget surplus and also the investment and trade balance. When the economy is in upswing then the government will collect more taxes as people will have more spending power. Similarly the investment balance would improve as firms would invest more in capital to cater to an increasing demand for goods and services. The trade balance would be in a deficit as improving conditions at home would mean that consumers at home have more purchasing power and hence imports would increase ...

Abstract

This paper explores the main macroeconomic indicators and gives the overall assessment of U.S. economy. We have overviewed the U.S. GDP growth, the rate of inflation and unemployment rate. We have identified the U.S. economy’s stage of business cycle. Based on the analyzed data, we have suggested the possible fiscal and monetary decisions that can facilitate economic revival. We have examined the main factors that can improve net trade balance. We have prepared the economic forecast for the following year based on the decisions made in terms of fiscal, monetary and trade policies. Keywords: GDP, macroeconomic, inflation, ...

Problem 1

In a fixed exchange rate regime (also known as pegged exchange rate), official exchange rate is tied to the exchange rate of another country. In some cases, it can be tied to the prices of gold. Free floating exchange rate changes freely and is determined by the demand and supply of that particular currency relative to other currencies. In the managed floating system, central bank at some frequency often intervenes not to allow the exchange rate getting away to some unexpected level. The fixed exchange rate system keeps currency value within a narrow range, whereas currency value can be volatile ...

Introduction

Norway has a mixed economy structure with government controlling the crucial sectors of the economy. The economy growth is majorly sustained by its natural resources. For a long time, the economy export had been supported by shipping. The key industries in the Norwegian economy are the petroleum and natural gas, food processing, textile, and shipping, among others. Norway’s currency is referred as the Norwegian Krone (NOK). Its current GDP stands at $499.98, and the GDP per capita is 53,293. The paper addresses the macroeconomic elements of the Norwegian economy, by looking into the present economic condition, as well as ...

Introduction

Switzerland is one of most prosperous economies of the world. Switzerland is a tiny nation with a tiny population but people are skilled, talented and hard working. This central European nation is a landlocked nation and it has limited natural resources. Switzerland is a model for other nations of the world and they can learn from Switzerland how a nation with limited resources can lodge its remarkable presence among other prominent countries of the world. This paper intends to discuss economy of Switzerland and delves deep in order to examine economic conditions, major issues and several other related aspects of the Swiss economy.

Overview

Switzerland ...

Introduction

The term “Macroeconomics” refers to the study of the aggregate performance of a particular economy . It is the branch of economics that deals with national income, consumption and investments. Macroeconomics differs from “microeconomics” in that the latter deals with the functions at an individual economic level . Microeconomics looks into how individuals react to variables that follow a behavioural path whereas Macroeconomics looks into aggregate national income and encompassing behaviours. Macroeconomics is what is known to be the type of economics that is reported in the news. Macroeconomic issues are often reported daily, including topics regarding national incomes, changing aggregate consumption ...

Impact of Macroeconomic Variables on My Business

Abstract I examined in this report the impact that the changes on the different macroeconomic variables e.g., price level, interest rate, and exchange rate have on the economy. Also, an analysis of how fiscal and monetary policies of the Australian government are presented as these policies and variables influence the success or failure of my business, the CadsBerri. Then my analysis dwell on the net value model by Brandenburger and Nalebuff to show that rational strategy could help my business survive despite the uncertainties posed by the macroeconomic environment.

Introduction

My business is on manufacturing and exporting of good ...

Oil and its products comprise some of the key commodities and products for any economy from their crucial role in energy supply. In addition, oil has been a commodity whose sourcing, production as well as marketing has being of great concern to many economic stakeholders as energy is one of the key drivers of economic growth and development. In addition, oil has been at the centre of governments’ policies focus as countries seek to secure supply and enhance production as well as tap the benefits that come with the precious commodity. In that respect, this analysis seeks to establish the ...

What were the cause and effect of the large U.S. trade imbalance during the postwar period? Most of the years after the World War II, United States has experienced the surplus in trade. However the oil price shock that occurred between 1973 and 1974 and 1979 and 1980 together with the global recession, subsequent to the second oil price shock, deteriorated the international trade. During the same time, United State began to experience the shifts in the international competitiveness. By 1970, most of the countries, mostly the freshly industrializing countries, were progressively growing competitive in the international trade. ...

Introduction

What is international trade and how is international trade significant to a mature, robust economy such as that of the United Kingdom’s. We know that experts say that international trade is an essential cog that keeps the wheels of the economy turning, and that wheel is an essential contributor to keeping the global economic machine in motion. It is therefore imperative that the concept of International Trade be fully understood and presented with respect to the UK economy and the world.

P10: The Significance of International Trade to UK Business Organisations

International trade is defined as the exchange of goods and services between two or more countries (Investopedia, 2013). ...

The kingdom of Saudi Arabia, located south west corner of Asia and at the crossroads of Europe, Asia and Africa, has approximately one fifth of the world’s proven oil reserves and is the largest oil producer and exporter of total petroleum liquids in the world (EIA, 2011). It is also world’s second largest crude oil producer behind Russia (Appendix 1a) (Williams and Martins, 2012). Despite disturbance in the neighboring region Saudi Arabia has been able to maintain the growth in 2012 for two reasons: first, government executing expansionary budget to support public spending has been accelerated ...

Introduction

The gold standard is a monetary system where the typical financial unit of account is/was a set mass of gold. At the time they were in use, there were distinct standards. For instance, the first standard was the gold specie standard, followed by the gold exchange standard, after which came the gold bullion standard.

Reason for collapse

The collapse of the gold standard was majorly because of its failure to support international expansion. It came under international pressure in the 1930s when there were international engagements in competitive devaluations. The commencing of the First World War marked the collapse of the gold standard. There ...

Venezuela is a Latin American country whose one of the main exports is oil. It has rich oil deposits which make a great contribution of to the national income through exports. This oil trade accounts for the largest share of the Venezuela’s exports from the industrial sector. The industrial exports in turn contribute about 60% of the total gross national income. Oil thus forms one of the basic economic generators or foreign exchange earners (Weisbrot, 2). A review of the Venezuelan economic development reveals that the economy has grown by over 94% of the anticipated rate. Though this has ...

Introduction

China Currency Trade Bill is a law that was approved by the United States Senate in September 2011. It is a law that proposes an addition of tariffs to nations, with China as the most notable, established to be devaluing their currency. The bill's main intention is to make expensive the imports from these nations, equalling the trade discrepancy and declining the nation’s imbalanced economic gain. The bill is contentious bill since China holds a huge economic impact, being top U.S. trading associates, and grips a huge U.S. debt. Imports and exports in totality will actually fall from 2013 onwards, but ...

Question 1

Most developing countries have large balance of payment deficit that have accumulated over the years. This has been caused by the high level of dependence by developing countries on the outside world which is evidenced by the large proportion of imports relative to exports. There various measures can be used by developing countries to correct balance of payment deficits.

First, a country can devalue its currency. Devaluation of a nation’s currency will result in downward shift in the value of the domestic currency relative to foreign currencies. Devaluation of the domestic currency will reduce the prices of exports while increasing ...

Corporate Foreign Exchange Risk Management

1. Assume the interest rate is higher in the U.K. than in the U.S.A. How should this affect the U.S. demand for British pounds, the supply of pounds for sale, and the equilibrium value of the pound?

An increase in the interest rate in the UK relative to the interest rate in USA will result in an increased demand for the British pounds, decrease in the supply of British pounds and an increase in the value of the British pound will increase relative to the US dollar. On the other hand, there will be a reduced demand for the US ...

The statistics, published today in the UK, is disappointing. Final figures for GDP in the first quarter was worse initial estimates and significantly below forecasts (Appendix 1). According to the ONS (Office of National Statistics), the economy has lost in the first quarter of this year about 2,4% (previously reported decline of 1.9%), while the decline for the first quarter of last year (2010) was amounted to 4,9% against the earlier estimate of 4.1%. The starting point of a recession is now called the second quarter of 2008, whereas previously talked about the zero dynamics in this period. ...

Introduction

Current account balance (CAB) of a country is the difference between the country’s savings and investments. A positive CAB measures the country’s savings abroad, while negative CAB measures the domestic investments financed by the savings of the foreigners. It is defined by the sum of the imports (both goods and services), plus the net investments outside the country, minus the exports (both goods and services). All the measurements are done in the domestic currency. It measures the country’s competitive strengths and also indicates the stability of the country’s currency. In 1970s and early 1980s, there ...