Chapter 4

Question 1 of 19

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4.1.2) Which of the following international transactions would NOT be counted as a balance of payments (BOP) transaction?

Select one of the following:

  • A) An American tourist purchases cheese in Milwaukee, Wisconsin.

  • B) The U.S. subsidiary of a British firm pays profits (dividends) back to its parent firm in London.

  • C) A Canadian lumber baron purchases a U.S. corporate bond through an investment broker in
    Seattle.

  • D) All of the above are considered BOP transactions.

Question 2 of 19

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4.1.1) Which of the following is NOT a major subaccount of the Balance of Payments?

Select one of the following:

  • A) the financial account

  • B) the accounts payable

  • C) the capital account

  • D) the current account

Question 3 of 19

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4.1.3) The balance of payments as applied to a course in international finance may be defined as:

Select one of the following:

  • A) the amount still owed by an exporting firm after making an initial down payment.

  • B) the amount still owed by governments to the International Monetary Fund.

  • C) the measurement of all international economic transactions between the residents of a country and foreign residents.

  • D) the amount of a country's merchandise trade deficit or surplus.

Question 4 of 19

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4.1.4) Balance of payment (BOP) data may be important for any of the following reasons:

Select one of the following:

  • A) BOP data helps to forecast a country's market potential, especially in the short run.

  • B) The BOP is an important indicator of a country's foreign exchange rate.

  • C) Changes in a country's BOP may signal a change in controls over payment of dividends and interest.

  • D) all of the choices provided above

Question 5 of 19

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4.1.5) A country experiencing a serious BOP ________ is more likely to ________ exports than otherwise.

Select one of the following:

  • A) surplus; contract

  • B) surplus; expand

  • C) deficit; expand

  • D) none of the above

Question 6 of 19

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4.1.6) Which of the following would NOT be considered a typical BOP transaction?

Select one of the following:

  • 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.

Question 7 of 19

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4.2.1) Which of the following is NOT a part of the CURRENT ACCOUNT of BOP?

Select one of the following:

  • A) net export/import of goods

  • B) balance of trade

  • C) net portfolio investment

  • D) net export/import of services

Question 8 of 19

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4.2.2) Which of the following is NOT part of the FINANCIAL ACCOUNT of the BOP?

Select one of the following:

  • A) net foreign direct investment

  • B) net import/export of services

  • C) net portfolio investment

  • D) other Financial items

Question 9 of 19

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4.2.3) Which of the following is NOT an item to be considered in BOP calculations?

Select one of the following:

  • 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 Florida Wal-Mart store.

  • D) A U.S. citizen living in Minnesota travels to Winnipeg, Canada, and buys a case of LaBatt's Canadian beer.

Question 10 of 19

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4.2.4) The balance of payments:

Select one of the following:

  • 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

Question 11 of 19

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4.2.5) An American tourist purchases a leather jacket while in Italy. Which of the following statements is true?

Select one of the following:

  • A) The leather purchase would be considered an import for the U.S. BOP.

  • B) This transaction would be properly accounted for in the Current Account of the U.S. BOP.

  • C) The leather purchase is considered an import of a good, and thus, considered part of the balance of trade as well.

  • D) All of these statements are true.

Question 12 of 19

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4.3.1) Which of the following is NOT part of the balance of payments account?

Select one of the following:

  • A) the current account

  • B) the financial/capital account

  • C) the official reserves account

  • D) All of the above are BOP accounts.

Question 13 of 19

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4.3.2) The ________ includes all international economic transactions with income or payment flows occurring within the year.

Select one of the following:

  • A) capital account

  • B) current account

  • C) financial account

  • D) IMF account

Question 14 of 19

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4.3.3) If your company were to import and export textiles, the transactions would be recorded in the current account subcategory of:

Select one of the following:

  • A) services trade.

  • B) income trade.

  • C) goods trade.

  • D) current transfers.

Question 15 of 19

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4.3.4) The travel services provided to international travelers by United Airlines would be recorded in the current account subcategory of:

Select one of the following:

  • A) services trade.

  • B) income trade.

  • C) goods trade.

  • D) current transfers.

Question 16 of 19

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4.3.5) 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:

Select one of the following:

  • A) services trade.

  • B) income trade.

  • C) goods trade.

  • D) current transfers.

Question 17 of 19

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4.3.6) The subcategory that typically dominates the current account is:

Select one of the following:

  • B) services trade.

  • C) income trade.

  • D) transfer accounts.

  • A) goods (merchandise) trade.

Question 18 of 19

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4.3.7) In 2010 the United States posted a current account deficit of -$471 billion. The bulk of the negative value came from:

Select one of the following:

  • A) a net transfer deficit.

  • B) an income balance deficit.

  • C) a goods trade deficit.

  • D) an income trade deficit.

Question 19 of 19

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4.3.8) Over the last two decades the surplus on U.S. services trade has typically been ________ the deficit on U.S. goods trade.

Select one of the following:

  • A) greater than

  • B) equal to

  • C) less than

  • D) The relationship is constantly shifting from greater than to less than.

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lauratorres0723
Quiz by , created almost 2 years ago

Quiz on Chapter 4, created by lauratorres0723 on 16/12/2014.

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