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Chapter 4
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Questions in this quiz (19)
14.1.2) Which of the following international transactions would NOT be counted as a balance of payments (BOP) transaction?
- AA) An American tourist purchases cheese in Milwaukee, Wisconsin.
- BB) The U.S. subsidiary of a British firm pays profits (dividends) back to its parent firm in London.
- CC) A Canadian lumber baron purchases a U.S. corporate bond through an investment broker in
Seattle. - DD) All of the above are considered BOP transactions.
- AA) An American tourist purchases cheese in Milwaukee, Wisconsin.
24.1.1) Which of the following is NOT a major subaccount of the Balance of Payments?
- AA) the financial account
- BB) the accounts payable
- CC) the capital account
- DD) the current account
- AA) the financial account
34.1.3) The balance of payments as applied to a course in international finance may be defined as:
- AA) the amount still owed by an exporting firm after making an initial down payment.
- BB) the amount still owed by governments to the International Monetary Fund.
- CC) the measurement of all international economic transactions between the residents of a country and foreign residents.
- DD) the amount of a country's merchandise trade deficit or surplus.
- AA) the amount still owed by an exporting firm after making an initial down payment.
44.1.4) Balance of payment (BOP) data may be important for any of the following reasons:
- AA) BOP data helps to forecast a country's market potential, especially in the short run.
- BB) The BOP is an important indicator of a country's foreign exchange rate.
- CC) Changes in a country's BOP may signal a change in controls over payment of dividends and interest.
- DD) all of the choices provided above
- AA) BOP data helps to forecast a country's market potential, especially in the short run.
54.1.5) A country experiencing a serious BOP ________ is more likely to ________ exports than otherwise.
- AA) surplus; contract
- BB) surplus; expand
- CC) deficit; expand
- DD) none of the above
- AA) surplus; contract
64.1.6) Which of the following would NOT be considered a typical BOP transaction?
- AA) Toyota U.S.A. is a U.S. distributor of automobiles manufactured in Japan by its parent company.
- BB) The U.S. subsidiary of European financial giant, Credit Suisse, pays dividends to its parent in Zurich.
- CC) A U.S. tourist purchases gifts at a museum in London.
- DD) All are example of BOP transactions.
- AA) Toyota U.S.A. is a U.S. distributor of automobiles manufactured in Japan by its parent company.
74.2.1) Which of the following is NOT a part of the CURRENT ACCOUNT of BOP?
- AA) net export/import of goods
- BB) balance of trade
- CC) net portfolio investment
- DD) net export/import of services
- AA) net export/import of goods
84.2.2) Which of the following is NOT part of the FINANCIAL ACCOUNT of the BOP?
- AA) net foreign direct investment
- BB) net import/export of services
- CC) net portfolio investment
- DD) other Financial items
- AA) net foreign direct investment
94.2.3) Which of the following is NOT an item to be considered in BOP calculations?
- AA) A foreign resident purchases a U.S. Treasury Bill.
- BB) A U.S.-based firm manages the development of an oil field in Kazakhstan.
- CC) A consumer buys a VCR made in Korea from a Florida Wal-Mart store.
- DD) A U.S. citizen living in Minnesota travels to Winnipeg, Canada, and buys a case of LaBatt's Canadian beer.
- AA) A foreign resident purchases a U.S. Treasury Bill.
104.2.4) The balance of payments:
- AA) determines the eligibility of countries for IMF aid.
- BB) adds up the value of all assets and liabilities of a country on a specific date.
- CC) records all international transactions for a country over a period of time.
- DD) all of the above
- AA) determines the eligibility of countries for IMF aid.
114.2.5) An American tourist purchases a leather jacket while in Italy. Which of the following statements is true?
- AA) The leather purchase would be considered an import for the U.S. BOP.
- BB) This transaction would be properly accounted for in the Current Account of the U.S. BOP.
- CC) The leather purchase is considered an import of a good, and thus, considered part of the balance of trade as well.
- DD) All of these statements are true.
- AA) The leather purchase would be considered an import for the U.S. BOP.
124.3.1) Which of the following is NOT part of the balance of payments account?
- AA) the current account
- BB) the financial/capital account
- CC) the official reserves account
- DD) All of the above are BOP accounts.
- AA) the current account
134.3.2) The ________ includes all international economic transactions with income or payment flows occurring within the year.
- AA) capital account
- BB) current account
- CC) financial account
- DD) IMF account
- AA) capital account
144.3.3) If your company were to import and export textiles, the transactions would be recorded in the current account subcategory of:
- AA) services trade.
- BB) income trade.
- CC) goods trade.
- DD) current transfers.
- AA) services trade.
154.3.4) The travel services provided to international travelers by United Airlines would be recorded in the current account subcategory of:
- AA) services trade.
- BB) income trade.
- CC) goods trade.
- DD) current transfers.
- AA) services trade.
164.3.5) Anaconda Copper Inc. created a subsidiary in Chile last year to mine copper ore. The proportion of net income paid back to the parent company as a dividend would be recorded in the current account subcategory of:
- AA) services trade.
- BB) income trade.
- CC) goods trade.
- DD) current transfers.
- AA) services trade.
174.3.6) The subcategory that typically dominates the current account is:
- AB) services trade.
- BC) income trade.
- CD) transfer accounts.
- DA) goods (merchandise) trade.
- AB) services trade.
184.3.7) In 2010 the United States posted a current account deficit of -$471 billion. The bulk of the negative value came from:
- AA) a net transfer deficit.
- BB) an income balance deficit.
- CC) a goods trade deficit.
- DD) an income trade deficit.
- AA) a net transfer deficit.
194.3.8) Over the last two decades the surplus on U.S. services trade has typically been ________ the deficit on U.S. goods trade.
- AA) greater than
- BB) equal to
- CC) less than
- DD) The relationship is constantly shifting from greater than to less than.
- AA) greater than
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- Quiz on Chapter 4, created by lauratorres0723 on 16/12/2014.
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