08SM2ans - Economics 502.01 ProfessorS. McCaffertv...

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Professor S. McCaffertv Economics 502.01 Midterm Examination II Spring,2008 Name: AUS t^-)WZS Directions: Answer all questions. There are two sections to this exam. Part I: Multiple Choice. Each question is worth two (2) points. Please circle the letter corresponding to the best answer. 1. If France has a trade deficit, then @/ imports into France exceed exports from France. b.) exports from France exceed imports into France. c.) imports into the United States from France exceed exports from the United States into France. d.) imports into France from the United States exceed exports from France into the United States. 2. If the United States donates footballs to Japan, how is the transaction recorded on the U.S. balance of payments accounts? a.) debit: exports; credit: capital and financial account b.) debit: capital and financial account; credit: exports @ AeUit: net unilateral transfers; credit: exports d.) debit: exports; credit: net unilateral transfers 3. Which of the following would be part of the nation's current account? a.) An old house purchased by an American in Italy b.) The purchase of a U.S. Treasury bond by a foreigner @
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L 5. The United States became a net debtor because @ rtran consistently large current account deficits' b.) it ran consistently latge current account surpluses. c.) it lent a lot to people in foreign countries. d.) it provided much foreign aid to other countries. 6. In goods market equilibrium in an open economy, a.) the desired amount of exports must equal the desired amount of imports' b.) the desired amount of exports must equal the desired amount of imports less the amount lent abroad. c.) the desired amount of national saving must equal the desired amount of domestic investment. the desired amount of national saving must equal the desired amount of domesttc investment plus the current account balance' i. Suppose output is $440 billion, government purchases are $40 billion, desired coniumption ir $:ZO billion, and net exports are $35 billion. Then desired investment equals a.) $20 billion. b.) $30 billion. c.) $35 billion. @ s+s billion. 8. When there are two large open economies, if desired international lending by the domestic country exceeds desired international borrowing by the foreign country, then a.) domestic saving must rise.
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This note was uploaded on 07/17/2008 for the course ECON 502.01 taught by Professor Mccafferty during the Spring '08 term at Ohio State.

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08SM2ans - Economics 502.01 ProfessorS. McCaffertv...

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