| Science Forum Index » Economy Forum » Two questions on Official Foreign Reserve Account and |
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| Brablo |
 Posted: Mon Dec 05, 2005 8:32 am |
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I read this in my book about economics: "If a company exporting goods
to the US receives US Dollars in payments, the company has the
following choices: Turn around and buy US goods with the dollars
(increases the current account balance)."
Wait a minute - I thought that this was the *other* way around: I
thought that this would *DECREASE* their current balance since money is
leaving their country. Is this an error?
Also, what is an Official Foreign Reserve Account? |
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| Bill |
| Posted: Mon Dec 05, 2005 11:47 pm |
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"Brablo" <gestureofrespect@yahoo.com> wrote in message
news:1133789535.715861.27230@f14g2000cwb.googlegroups.com...
[quote:109a75538a]I read this in my book about economics: "If a company exporting goods
to the US receives US Dollars in payments, the company has the
following choices: Turn around and buy US goods with the dollars
(increases the current account balance)."
Wait a minute - I thought that this was the *other* way around: I
thought that this would *DECREASE* their current balance since money is
leaving their country. Is this an error?
[/quote:109a75538a]
It depends on which side you are looking from. It improves it from a US point
of view.
[quote:109a75538a]Also, what is an Official Foreign Reserve Account?
[/quote:109a75538a]
I don't know. I'm guessing it is the amount of Foreign Reserves held by the
central bank that they can use in the open market.
Bill |
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