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Welcome to Econ 414 International EconomicsAsst 6: Given the following information, find Ireland’s (1) merchandise balance, (2) goods and services balance, (3) current account balance, (4) capital account balance and (5) statistical discrepancy.Key to Asst 6Slide 4Slide 5Slide 6Slide 7Exam 31Welcome to Econ 414 International EconomicsStudy GuideWeek twelve2Asst 6: Given the following information, find Ireland’s (1) merchandise balance, (2) goods and services balance, (3) current account balance, (4) capital account balance and (5) statistical discrepancy.1. Ireland exports €50 worth of shoes2. A German tourist gets a hair cut in Galway (€30)3. Ireland imports €100 worth of TVs4. Irish government sends €10 worth of aid to Afghanistan5. A Japanese buys €90 Irish government bond6. An Irish tourist goes to movies in Germany (€15)7. An Irish buys a €55 German bond.3Key to Asst 61. Merchandise Account has two items in it 1. Ireland exports €50 worth of shoes2. Ireland imports €100 worth of TVs►Merchandise Balance = 50-100 = -504Key to Asst 62. Goods and Services Account includes merchandise account plus 2 additional items1. A German tourist gets a hair cut in Galway (€30)2. An Irish tourist goes to movies in Germany (€15)►Goods and Services Balance = -50 + 30 – 15 = -355Key to Asst 63. Current Account includes goods and services plus gifts►Irish government sends €10 worth of aid to Afghanistan►Current Account Balance = -35-10 = - 456Key to Asst 64. Capital Account includes1. A Japanese buys €90 Irish government bond2. An Irish buys a €55 German bond►Capital Account Balance = 90-55=357Key to Asst 65. We know that Balance of Payments = 0Current Account Balance + Capital Account Balance +Statistical Discrepancy = 0-45+35+Statistical Discrepancy = 0•Statistical Discrepancy= 108Exam 3 •Wednesday, November 14 •2 PM, in Thomas 223•Covers –Chapters 7, 8, and


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MARIETTA ECON 414 - Study Guide

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