FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 40: The Balance of Payments, Exchange Rates, and Trade Deficits

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Multiple Choice

Review LaterAdd Note

Review Later

The current account section in a nation's balance of payments includes:

A) its goods exports and imports,and its services exports and imports.
B) foreign purchases of domestic assets.
C) purchases of foreign assets.
D) all of these.

E) All of the above
F) A) and B)

Correct Answer

verified

Show Answer

Question 62

Multiple Choice

Review LaterAdd Note

Review Later

Currency speculators aid international trade by:

A) absorbing exchange rate risk that others do not want to bear.
B) increasing the volatility of exchange rates.
C) making the demand for imports less elastic.
D) promoting barter.

E) A) and B)
F) B) and D)

Correct Answer

verified

Show Answer

Question 63

Multiple Choice

Review LaterAdd Note

Answer the question on the basis of the following 2012 balance of payments data (+ and -) for the hypothetical nation of Zabella.All figures are in billions of dollars. $\begin{array}{c}\begin{array}{lll}\text {Current Account}\\\hline \text {1) Goods Exports}\\\text {2) Goods Imports}\\\text {3) Exports of Services}\\\text {4) Imports of Services}\\\text {5) Net Investment Income}\\\text {6) Net Transfers}\\\\\text {Financial Account}\\\hline \text {7) Foreign Purchases of Assets in the United States}\\\text {8) US Purchases of Assets Abroad}\\\\\text {Capital Account}\\\hline \text {9) Balance on Capital Account}\end{array}\begin{array}{r}\\\hline+\$ 80 \\-70 \\+20 \\-25 \\+5 \\-5 \\\\\\\hline+13 \\-23\\\\\\\hline+5 \end{array}\end{array}$ Refer to the given data.Zabella's balance on capital and financial account shows a:

In saying that the present system of floating exchange rates is managed,we mean that:

Assume that,under a system of floating exchange rates,Mexicans decide to increase their investments in the United States.As a result:

Which of the following would call for inpayments to the United States?

Answer the question on the basis of the following information.In 1985,the exchange rate between the U.S.dollar and the Japanese yen was $1 = 262 yen;in 2003,the rate was $1 = 110 yen. Refer to the given information.Which one of the following might be a plausible explanation for the change in the dollar-yen exchange rate from 1985 to 2003?

Which one of the following is not one of the so-called G8 nations?

The Group of Eight (G8) nations which periodically have jointly intervened to influence the value of the dollar include:

The U.S.demand for euros is:

A deficit on the current account:

In the balance of payments of the United States,U.S.goods imports are recorded as a:

The following table contains hypothetical data for the 2012 U.S.balance of payments.Answer the question on the basis of this information.All figures are in billions of dollars. $\begin{array}{lrrr} \text { 1) US Goods Exports } & +\$100\\ \text {2) US Goods Imports } &-80\\ \text {3) US Service Exports } &+40\\ \text {4) US Service Imports } &-90\\ \text { 5) Net Investment Income } &+20\\ \text { 6) Net Transfers } &-15\\ \text {7) Foreign Purchases of Assets in the United States } &+30\\ \text {8) US Purchases of Foreign Assets Abroad } &-10\\ \text { 9) Balance on Capital Account } &+5\\\end{array}$ Refer to the given data.The U.S.balance on goods and services is a:

If in a system of fixed exchange rates the dollar price of euros is above the market equilibrium level:

Answer the question on the basis of the following 2008 balance of payments statement for Transylvania.All figures are in billions of dollars. $\begin{array}{c}\begin{array}{lll}\text { 1) Goods Exports}\\\text { 2) Goods Imports}\\\text { 3) Service Exports}\\\text { 4) Service Imports}\\\text { 5) Net Investment Income}\\\text { 6) Net Transfers}\\\text { 7) Foreign Purchases of Assets}\\\text { 8) Purchases of Foreign Assets}\\\text { 9) Balance on Capital Account}\end{array}\begin{array}{r}+\$ 15 \\-17 \\+5 \\-2 \\-5 \\+4 \\+5 \\-11 \\+1\end{array}\end{array}$ Refer to the given data.In 2008,Transylvania imported more products than it exported.

Which of the following will generate a demand for country X's currency in the foreign exchange market?

The current system of exchange rates can best be described as:

If a nation has a current account deficit and it does not have to make any inpayments or outpayments of official reserves,it must have a:

Suppose the G8 nations decide that the dollar is too strong (high in value) relative to the yen.These nations might:

If the rate of exchange for a pound is $4,the rate of exchange for the dollar is: