prac exam#1_wi2017 - Econ171 International Finance Practice...

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1 Econ171 International Finance – Practice Exam #1 Winter 2017 I. True or False State whether a given paragraph is true or false and explain your answer briefly if your choice is false. 1. Restrictions on imports (in the form of higher import tariffs) from foreign countries would lower imports and thus necessarily reduce a U.S. current account deficit. 2. A Canadian tourist pays $30 for dinner at a restaurant in Riverside by charging his visa credit card. The meal purchase enters the U.S. current account with a positive sign (credit) and the $30 of credit card payment enters the U.S. financial account with a negative sign (debit). 3. If there is initially an excess supply of money, the interest rate will rise, and if there is initially an excess demand, it will fall. 4. An open economy can save only by building up its capital stock.
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2 II. Short Answer Questions Explain your answer in a short paragraph and show your calculation or graph when applicable.
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