For Each of the Following Transactions,explain What Happens to the Merchandise

question 35

Essay

For each of the following transactions,explain what happens to the merchandise trade balance,current account balance,and financial account balance in both the United States and Mexico.The exchange rate is 2 Mexican pesos per U.S.dollar.
(a)A Mexican firm spends 4 million pesos to buy radiology equipment from a U.S.firm.
(b)A U.S.firm buys 20,000 sombreros at 20 pesos each.
(c)Mexican computer firms send 200 programmers to universities in the United States,paying tuition and expenses of $3000 each.
(d)A Mexican entrepreneur gives 50,000 pesos to the United Way of San Antonio,Texas.
(e)Mexican investors buy $10 million worth of 30-year U.S.Treasury bonds.

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Definitions:

Argumentum Ad Hominem

A fallacy in debate that targets a person's character or personal traits in an attempt to discredit their argument, rather than addressing the argument itself.

Market Forces

The various factors, such as supply and demand, that influence the price and availability of goods and services in a market.

Corporate Misbehavior

Describes unethical or illegal actions taken by companies or their representatives.

Corporate Management

Corporate management involves the processes, strategies, and decisions employed in directing and controlling the operations of a corporation to achieve its objectives and maximize shareholder value.