Question

5) Use the following transactions and fill the table below. All these transactions will affect the foreign exchange markets (shifts of supply and demand curves), and Turkey'sbalance of payment (surplus or deficit on which account of BoP) and the value of TL (appreciation or depreciation). Assume that balance of payment is initially at zero. Indicate only the initial change in BOP. FX Market i ii iii iv v vi Current Acc. Capital Acc. Value of TL i) Turkey buys French wine. ii) Qatari investors built a plant in Turkey. iii) A Spanish corporation receives dividends from a Turkish subsidiary. iv) EXPO holds its organizations in ?zmir with all member countries attending. v) Turkish investors buy Swiss stocks. vi) Turkey sells textiles to Russia. 6) Suppose that the exchange rate between US dollar and Turkish Lira changes from $1.00=6 TL to $1 = 7 TL. Determine whether the underlined individuals listed below would see this change as a good or a bad thing. a. A US businessperson is planning to buy 70,000 TL of textile products from a Turkish Company. b. A Turkish chemical company is planning to buy $100,000 of ethyl alcohol from a US producer of ethyl alcohol. c. A US resident has a saving account of 420,000 TL in a Turkish bank. d. A US company must make an interest payment of 840,000 TL to the Turkish bank from which it borrowed last year.

          5) Use the following transactions and fill the table below. All these transactions will
affect the foreign exchange markets (shifts of supply and demand curves), and
Turkey'sbalance of payment (surplus or deficit on which account of BoP) and the
value of TL (appreciation or depreciation). Assume that balance of payment is initially
at zero. Indicate only the initial change in BOP.
FX Market
i
ii
iii
iv
v
vi
Current Acc.
Capital Acc.
Value of TL
i) Turkey buys French wine.
ii) Qatari investors built a plant in Turkey.
iii) A Spanish corporation receives dividends from a Turkish subsidiary.
iv) EXPO holds its organizations in ?zmir with all member countries attending.
v) Turkish investors buy Swiss stocks.
vi) Turkey sells textiles to Russia.
6) Suppose that the exchange rate between US dollar and Turkish Lira changes from
$1.00=6 TL to $1 = 7 TL. Determine whether the underlined individuals listed below
would see this change as a good or a bad thing.
a. A US businessperson is planning to buy 70,000 TL of textile products from a
Turkish Company.
b. A Turkish chemical company is planning to buy $100,000 of ethyl alcohol from a
US producer of ethyl alcohol.
c. A US resident has a saving account of 420,000 TL in a Turkish bank.
d. A US company must make an interest payment of 840,000 TL to the Turkish bank
from which it borrowed last year.

5) Use the following transactions and fill the table below. All these transactions will
affect the foreign exchange markets (shifts of supply and demand curves), and
Turkey'sbalance of payment (surplus or deficit on which account of BoP) and the
value of TL (appreciation or depreciation). Assume that balance of payment is initially
at zero. Indicate only the initial change in BOP.
FX Market
i
ii
iii
iv
v
vi
Current Acc.
Capital Acc.
Value of TL
i) Turkey buys French wine.
ii) Qatari investors built a plant in Turkey.
iii) A Spanish corporation receives dividends from a Turkish subsidiary.
iv) EXPO holds its organizations in ?zmir with all member countries attending.
v) Turkish investors buy Swiss stocks.
vi) Turkey sells textiles to Russia.
6) Suppose that the exchange rate between US dollar and Turkish Lira changes from
1.00=6 TL to1 = 7 TL. Determine whether the underlined individuals listed below
would see this change as a good or a bad thing.
a. A US businessperson is planning to buy 70,000 TL of textile products from a
Turkish Company.
b. A Turkish chemical company is planning to buy 100,000 of ethyl alcohol from a
US producer of ethyl alcohol.
c. A US resident has a saving account of 420,000 TL in a Turkish bank.
d. A US company must make an interest payment of 840,000 TL to the Turkish bank
from which it borrowed last year.

Added by Lisa P.

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