1309 1310 1311 1312 When the dollar value of the Swiss franc was very high following the financial crisis in 2008 Swiss exports were more expensive in the United States True Answer Correct Swiss exports were less expensive in the United States Incorrect the Swiss National Bank sold Swiss francs to increase its value Incorrect the Swiss National Bank bought francs to decrease its value Incorrect Open economy macroeconomics is the branch of economics that deals with reducing regulations on business Incorrect the relationships between economies of different nations True Answer Correct reducing employment discrimination Incorrect the provision of financial information to investors Incorrect If the United States imports more goods from Japan than it exports to Japan how can the difference be financed U S consumers would simply borrow money from domestic banks Incorrect The United States could buy more Japanese assets Incorrect The United States could sell assets and create a liability obligating Americans to pay for those imports in the future True Answer Correct The United States could sell assets to the Japanese which would reduce its liabilities Incorrect Economists summarize a country s transactions with other countries with a n account circular flow Incorrect balance of payments True Answer Correct exchange rate Incorrect purchasing power parity Incorrect 1313 1314 131 5 When the United States gives foreign aid to developing nations in Africa which of the following balance of payments account is affected current account True Answer Correct financial account Incorrect reserve account Incorrect foreign exchange account Incorrect The difference between a country s exports and imports of goods alone not including services is the merchandise trade balance True Answer Correct balance of payments on good and services Incorrect balance of payments on current account Incorrect current account Incorrect Table International Transactions Reference Ref 34 1 Table International Transactions Refer to the information in the table The merchandise trade balance is 51 000 Incorrect 48 000 True Answer Correct 46 000 Incorrect 2 000 Incorrect 131 6 Table International Transactions Reference Ref 34 1 Table International Transactions Refer to the information in the table The balance of payments on goods and services is 51 000 True Answer Correct 48 000 Incorrect 3 000 Incorrect 29 000 Incorrect 131 7 Table International Transactions Reference Ref 34 1 Table International Transactions Refer to the information in the table The balance on current account is 29 000 Incorrect 22 000 Incorrect 8 000 Incorrect 29 000 True Answer Correct 131 8 Table International Transactions Reference Ref 34 1 Table International Transactions Refer to the information in the table What additional capital inflows are needed to equilibrate the balance of payments 29 000 Incorrect 20 000 Incorrect 29 000 Incorrect 80 000 True Answer Correct 1319 1320 1321 1322 1323 If the balance of payments on financial account is 25 the balance of payments on goods and services is 20 and the statistical discrepancy in the financial account is 2 then net international transfer payments and net international factor income are 7 True Answer Correct 5 Incorrect 7 Incorrect 47 Incorrect Which of the following would be included in the U S current account factory in Japan purchased by a firm in the United States Incorrect share of stock of a company in the United States sold to someone in Japan Incorrect dividend on a share of stock of a company in the United States paid to someone in Japan True Answer Correct bond issued by a firm in Japan sold to someone in the United States Incorrect When a Japanese investor buys stock in General Motors which of the following balance of payments accounts is affected current account Incorrect financial account True Answer Correct reserve account Incorrect foreign exchange account Incorrect If the United States exports 100 billion of goods and services and imports 150 billion of goods and services and there is no other factor income or transfers the balance on the current account is 250 billion Incorrect 250 billion Incorrect 50 billion Incorrect 50 billion True Answer Correct If the United States exports 100 billion of goods and services and imports 150 billion of goods and services and there is no other factor income or transfers the balance on the financial account is 1324 1325 1326 1327 250 billion Incorrect 250 billion Incorrect 50 billion True Answer Correct 50 billion Incorrect Assume that Tom sells a crate of Florida oranges to a retailer in Canada and Susan sells a U S bond to a customer in Britain Which of the following illustrates the difference and or similarities between these two transactions Only Tom will actually receive U S dollars as a result of this transaction Incorrect The sale of the bond to the customer in Britain creates a liability while the sale of the oranges does not True Answer Correct Both sales create an asset for the United States Incorrect Both sales create a liability for the United States Incorrect If a country has a current account deficit it must have a financial account surplus True Answer Correct balance of payment surplus Incorrect financial account deficit Incorrect balance of payments deficit Incorrect Which of the following would be included in the U S financial account a computer made in the United States and exported to Britain Incorrect a computer made in Britain and imported into the United States Incorrect interest on a U S company s bond sold to someone living overseas Incorrect the value of a bond from a company in the United States sold to someone living in Britain True Answer Correct Which of the following would NOT be included in the U S financial account factory in Japan purchased by a U S company Incorrect share of stock in a company in the United States sold to someone in Japan Incorrect bond issued by a firm in Japan sold to someone in the 1328 1329 1330 1331 1332 United States Incorrect a video game made in China and imported into the United States True Answer Correct Which of the following would be included in the U S current account public purchases and sales of financial assets Incorrect trade balance True Answer Correct financial account balance Incorrect private purchases and sales of financial assets Incorrect If a country has a positive balance of payments on the current account then it must be exporting too much Incorrect be importing too much
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