This topic contains a solution. Click here to go to the answer

Author Question: Consider how the United States balance of payments accounts are affected when U.S. banks forgive two ... (Read 72 times)

wenmo

  • Hero Member
  • *****
  • Posts: 540
Consider how the United States balance of payments accounts are affected when U.S. banks forgive two billion in debt owed to them by the government of Argentina.
 
  What will be an ideal response?

Question 2

Define risk aversion and give an example of a risk-averse person?
 
  What will be an ideal response?



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

mceravolo

  • Sr. Member
  • ****
  • Posts: 349
Answer to Question 1

In this case, the United States makes a two billion dollars capital transfer to Argentina, which should appear as a negative two billions entry in the capital account. The associated credit is in the financial account, in the form of a two billion dollars reduction in U.S. assets held abroad, i.e., a net asset export, and therefore a positive balance of payments entry.

Answer to Question 2

Risk aversion is a characteristic of a person that dislikes risk. An example of this is someone who takes out rental or home insurance to reduce the risk of some kind of catastrophe from happening.





 

Did you know?

Autoimmune diseases occur when the immune system destroys its own healthy tissues. When this occurs, white blood cells cannot distinguish between pathogens and normal cells.

Did you know?

Nearly 31 million adults in America have a total cholesterol level that is more than 240 mg per dL.

Did you know?

Hippocrates noted that blood separates into four differently colored liquids when removed from the body and examined: a pure red liquid mixed with white liquid material with a yellow-colored froth at the top and a black substance that settles underneath; he named these the four humors (for blood, phlegm, yellow bile, and black bile).

Did you know?

There are 60,000 miles of blood vessels in every adult human.

Did you know?

If all the neurons in the human body were lined up, they would stretch more than 600 miles.

For a complete list of videos, visit our video library