A country experiencing a serious bop is more likely

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Applied Calculus
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Chapter 4 / Exercise 68
Applied Calculus
Berresford/Rockett
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3) A country experiencing a serious BOP ________ is more likely to ________ exports than otherwise. A) surplus; contract B) deficit; contract C) deficit; expand D) none of the above Answer: A Topic: BOP Understanding Skill: Analytical 4) Which of the following would NOT be considered a typical BOP transaction? A) Toyota U.S.A. is a U.S. distributor of automobiles manufactured in Japan by its parent company. B) The U.S. subsidiary of European financial giant, Credit Suisse, pays dividends to its parent in Zurich. C) A U.S. tourist purchases gifts at a museum in London. D) All are example of BOP transactions. Answer: D Topic: BOP Understanding Skill: Conceptual 5) The authors identify a tip for understanding BOP accounting. They recommend that you "follow the cash flow." Answer: TRUE Topic: BOP Introduction Skill: Recognition
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Applied Calculus
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Chapter 4 / Exercise 68
Applied Calculus
Berresford/Rockett
Expert Verified
2 6) The BOP must be in balance but the current account need not be. Answer: TRUE Topic: Current Account Skill: Recognition 7) Which of the following is NOT a part of the Current Accountof BOP? A) net export/import of goods B) Balance of Trade C) net portfolio investment D) net export/import of services Answer: C Topic: Current Account Skill: Recognition 8) Which of the following is NOT part of the Financial Accountof the BOP? A) net foreign direct investment. B) net import/export of services C) net portfolio investment D) other Financial items Answer: B Topic: Financial Account Skill: Recognition 9) Expenditures by U.S. tourists in foreign countries for foreign goods or services are factored into BOP calculations. Answer: TRUE Topic: BOP Understanding Skill: Recognition 10) Which of the following is NOT an item to be considered in BOP calculations? A) A foreign resident purchases a U.S. Treasury Bill. B) A U.S.-based firm manages the development of an oil field in Kazakhstan. C) A consumer buys a VCR made in Korea from a Wal-Mart store. D) A U.S. citizen living in Minnesota travels to Winnipeg, Canada and buys a case of LaBatt's Canadian beer. Answer: C Topic: BOP Understanding Skill: Conceptual 11) The balance of paymentsis most like a(an) ________. A) cash flow statement B) balance sheet C) income statement D) proxy statement Answer: A Topic: Balance of payments Skill: Recognition
3 12) The balance of payments A) determines the eligibility of countries for IMF aid. B) adds up the value of all assets and liabilities of a country on a specific date. C) records all international transactions for a country over a period of time. D) all of the above. Answer: C Topic: Balance of payments Skill: Recognition

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