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Macroeconomics

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Balance of Payments Effects of International Aid: Revisited

MACRO-XY42TB

Suppose the U.S. Red Cross sends 10,000,000 dollars of humanitarian aid to Chile in the wake of an earthquake there. Assume, however, that this aid takes the form of access to funds on deposit at a commercial bank in New York City.

For each account below enter 10,000,000, 0, or -10,000,000, as appropriate.