Which of the following is included in the capital account in the BOP? A) US-owned assets abroad B) US-owned assets in the US C) Unilateral transfers D) All are included in the capital account. ANSWER A
Date: September 10th, 2020
According to the HO model, countries with different factor endowments but similar technologies and preferences will have a strong basis for trade with each other. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
With floating exchange rates A) monetary policy is effective. B) fiscal policy is ineffective. C) monetary and fiscal policy are effective. D) fiscal and monetary policy are ineffective. ANSWER A
Date: September 10th, 2020
Security purchases in the United States by foreigners is A) a credit item in the current account. B) a debit item in the capital account. C) a credit item in the capital account. D) a debit item in the current account. ANSWER C
Date: September 10th, 2020
Current account deficits are offset by A) the liquidity balances. B) capital account surpluses. C) the basic balance. D) balance of trade surpluses. ANSWER B
Date: September 10th, 2020
The relocation of service industry functions to another country is called what? What will be an ideal response? ANSWER Offshoring
Date: September 10th, 2020
Emigration is when people leave a country because of supply push factors. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
If the factor price equalization theorem is true then, eventually, U.S. wages will fall to the level found today in the least developed countries of the world. Indicate whether the statement is true or false ANSWER FALSE Explanation: Technology differences exist, negating HO predictions.
Date: September 10th, 2020
Which of the following is not a necessary condition for a flat BP curve? A) perfect capital mobility B) perfect asset substitutability C) fixed exchange rates D) floating exchanges rates E) Both C and D ANSWER E
Date: September 10th, 2020
General equilibrium considerations lead to the realization that import-substituting policies have the effect of A) discouraging exports. B) encouraging exports. C) encouraging an efficient use of a country’s resources. D) generating large tariff revenues for the government. E) creating competitive manufacturing sectors. ANSWER A
Date: September 10th, 2020
