tb11[1] - CHAPTER 11 THE BALANCE OF PAYMENTS...

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CHAPTER 11 THE BALANCE OF PAYMENTS MULTIPLE-CHOICE QUESTIONS 1. On the balance-of-payments statements, merchandise imports are classified in the: a. Current account b. Capital account c. Unilateral transfer account d. Official settlements account 2. The balance of international indebtedness is a record of a country’s international: a. Investment position over a period of time b. Investment position at a fixed point in time c. Trade position over a period of time d. Trade position at a fixed point in time 3. Which balance-of-payments item does not directly enter into the calculation of the U.S. gross domestic product? a. Merchandise imports b. Shipping and transportation receipts c. Direct foreign investment d. Service exports 4. Which of the following is considered a capital inflow ? a. A sale of U.S. financial assets to a foreign buyer b. A loan from a U.S. bank to a foreign borrower c. A purchase of foreign financial assets by a U.S. buyer d. A U.S. citizen’s repayment of a loan from a foreign bank 5. Which of the following would call for inpayments to the United States? a. American imports of German steel b. Gold flowing out of the United States c. American unilateral transfers to less-developed countries d. American firms selling insurance to British shipping companies 182
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183 Test Bank for International Economics, 9e 6. In a country’s balance of payments, which of the following transactions are debits ? a. Domestic bank balances owned by foreigners are decreased b. Foreign bank balances owned by domestic residents are decreased c. Assets owned by domestic residents are sold to nonresidents d. Securities are sold by domestic residents to nonresidents 7. Which of the following is classified as a credit in the U.S. balance of payments? a. U.S. exports b. U.S. gifts to other countries c. A flow of gold out of the U.S. d. Foreign loans made by U.S. companies Table 11.1 gives hypothetical figures for U.S. International Transactions. On the basis of this information, answer Questions 8 and 9. Table 11.1. U.S. International Transactions Amount Transaction (billions of dollars) Merchandise imports 110 Military transactions, net –5 Remittances, pensions, transfers –20 U.S. private assets abroad –50 Merchandise exports 115 Investment income, net 15 U.S. government grants (excluding military) –5 Foreign private assets in the U.S. 25 Compensation of employees –5 Allocation of SDRs 5 Travel and transportation receipts, net 20 8. Based on the information provided in Table 11.1, the goods and services balance equals: a. $5 billion b. $15 billion c. $20 billion d. $25 billion 9. Based on the information provided in Table 11.1, the current account balance equals: a. –$5 billion b. –$10 billion c. –$15 billion d. –$20 billion
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Chapter 11: The Balance of Payments 184 10. Unlike the balance of payments, the balance of international indebtedness indicates the international: a. Investment position of a country at a given moment in time b. Investment position of a country over a one-year period
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This note was uploaded on 07/10/2008 for the course ECON 351 taught by Professor Santiago during the Fall '06 term at Wisconsin Milwaukee.

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tb11[1] - CHAPTER 11 THE BALANCE OF PAYMENTS...

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