ECON210- State how following transactions would be recorded in Singapore’s balance of payments monetary economics assignment help

Code – ECON210 Assignment Help

Subject – Economics Assignment Help

QUESTION 1

(a) State how the following transactions would be recorded in Singapore’s’ Balance of payments. In your answer state the item, the relevant account, and whether it is a credit or a debit entry.

(i) A Singaporean resident purchases a dairy farm in New Zealand

(ii) A UK resident visits their relatives in Singapore and spends SGD 600 shopping on Orchard road.

(iii) An Australian resident purchases a factory in Malaysia from a Singaporean resident

(iv) A Singaporean company pays dividends to its Australian shareholders

(v) An Australian resident receives income for services rendered in Singapore

(b) Review the table below:-

 

	Unit	Data S$M	Previous Period
Balance of Payments	S$m	3,530.80	4,141.10
Current Account Balance	S$m	19,600.60	24,194.50
Exports of Goods and Services	S$m	224,918.40	220,269.20
Imports of Goods and Services	S$m	191,669.00	183,147.20
Primary Income Balance	S$m	-11,611.60	-10,716.50
Secondary Income Balance	S$m	-2,037.20	-2,211.00
Reserve Assets	S$m	3,530.80	4,141.10
Official Foreign Reserves	US$m	282,995.20	278,625.10
Net International Investment Position	S$m	1,207,120.5

Provide an economic assessment of the data presented. In your answer refer to the economic significance of the various accounts in the balance of payments, the role of the central bank, international net debt, changes in foreign investment and changes in trade flows, savings, and investment differentials.

QUESTION 2

In the context of National Income Accounting and the Intertemporal model: Consider a country “smartville” with a closed economy real rate of interest of 3% while the prevailing world interest rate is 1.5%.

(i) Use the Metzler diagram as a framework to critically evaluate the likely outcomes for the “smartville” economy. In your answer refer to the current account balance, savings and investment, comparative advantage, and discuss how “smartville” might gain from opening up to trade with the rest of the world in this context.

QUESTION 3

Consider models of Exchange rate determination.

Assume interest parity holds and the return on a domestic asset is equal to the covered return on a foreign asset. In the domestic economy, the central bank decreases the interest rate in order to stimulate the economy.

Using both covered and uncovered interest parity conditions identify the direction variables would be expected to move in response to the policy changes in order to restore parity. What role do expectations play if any in this process?

ECON210- State how following transactions would be recorded in Singapore’s balance of payments monetary economics assignment help

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