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1 | |
The total balance-of-payments statement |
| | A) | reflects a deficit when a country's exports exceed its imports. |
| | B) | reflects a surplus when a country's exports exceed its imports. |
| | C) | is always in balance. |
| | D) | could reflect a deficit, surplus, or be in balance depending on prevailing economic conditions. |
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2 | |
A Japanese tourist's trip to New York shows up as |
| | A) | a credit item in America's balance of payments account. |
| | B) | a debit item in America's balance of payments account. |
| | C) | a credit item in Japan's balance of payments account. |
| | D) | b and c |
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3 | |
During the period between 1990 and 2000, global outflows of foreign direct investment __________; after 2000, global outflows of foreign direct investment __________. |
| | A) | increased dramatically; increased, but more gradually |
| | B) | increased dramatically; decreased |
| | C) | decreased gradually; increased dramatically |
| | D) | decreased gradually; continued to decrease |
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4 | |
When a Mexican working in the U.S. sends a $1,500 laptop as a gift to his brother in Mexico, |
| | A) | a debit of -$1,500 in Category I, Unilateral Transfers is entered in the U.S.'s balance of payment account. |
| | B) | a credit of +$1,500 in Category I, Exports of Goods is entered in the U.S.'s balance of payment account. |
| | C) | a debit of -$1,500 in Category I, Imports of Goods is entered in the U.S.'s balance of payment account. |
| | D) | a and b. |
| | E) | a and c. |
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5 | |
A balance of trade surplus of $6 billion implies that |
| | A) | exports minus imports equals +$6 billion. |
| | B) | exports minus imports equals -$6 billion. |
| | C) | the overall balance of payments account is enjoying a surplus of +$6 billion. |
| | D) | none of the above. |
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6 | |
A country with a current account deficit is |
| | A) | saving less than it invests. |
| | B) | becoming steadily wealthier at the expense of the rest of the world. |
| | C) | saving more than it invests. |
| | D) | necessarily running a government budget surplus. |
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7 | |
As of 2003, the U.S. was running a current account __________ and a capital and financial account __________. |
| | A) | surplus; surplus |
| | B) | surplus; deficit |
| | C) | deficit; surplus |
| | D) | deficit; deficit |
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8 | |
Which of the following is true? |
| | A) | The U.S. had a merchandise trade deficit from the mid-1970s to the early 1990s, but a merchandise trade surplus since the early 1990s. |
| | B) | The U.S. had a merchandise trade surplus from the mid-1970s to the early 1990s, but a merchandise trade deficit since the early 1990s. |
| | C) | The U.S. has had a merchandise trade deficit since the mid-1970s |
| | D) | The U.S. has had a merchandise trade surplus since the mid-1970s. |
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9 | |
Being a net international debtor could be good for a country because |
| | A) | these financial inflows may generate income which could offset the debt. |
| | B) | the situation implies an increase in national sovereignty. |
| | C) | these financial inflows may keep domestic interest rates low. |
| | D) | all of the above. |
| | E) | a and c only. |
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10 | |
The purpose of the "statistical discrepancy" line in the balance of payments account statement is to ensure |
| | A) | national sovereignty |
| | B) | a positive current account balance. |
| | C) | that Category I always equals Category IV. |
| | D) | that debits exactly match credits. |
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