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Suppose that two events occur simultaneously: (i) A firm in country A exports $1,000 of goods to country B and receives a $1,000 bank deposit in country B in exchange; and (ii) a country A immigrant gives $500 to a relative in country B in the form of a $500 buildup of the relative's bank account in country A. What is the impact of these two events on country A's

(a) merchandise trade balance,

(b) current account balance, and

(c) official reserve transactions balance?

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M92756335

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