All of the following are the reasons why Gross National Income does not equal Gross Domestic Product in an open economy EXCEPT: A) the capital and labor used to produce the goods in the domestic country do not need to be owned by domestic residents. B) the country may receive transfer payments from abroad or […]
Date: September 19th, 2020
The sale of American computers to the Spanish government shows up as A) a debit on the official reserves account. B) a credit on the official reserves account. C) a credit on the trade account. D) a debit on the current account. ANSWER Answer: C
Date: September 19th, 2020
In a freely floating exchange rate system, if the capital account is running a deficit A) the balance of payments must run a deficit. B) the balance of payments must be zero. C) the current account must run a surplus. D) both B and C. ANSWER Answer: D
Date: September 19th, 2020
Balance sheets A) show how the firm raised funds to purchase assets. B) report a firm’s activities over a period of time. C) describe a firm’s cash flows. D) provide information about a firm’s labor costs. E) may not balance if the firm suffered a net loss. ANSWER A
Date: September 19th, 2020
If you have the exchange rates for converting U.S. dollars to yen and U.S. dollars to the euro, you could convert from yen to euros by using a: A) Spot rate B) Indirect rate C) Counter rate D) Cross rate ANSWER D
Date: September 19th, 2020
Tourism would show up on the A) merchandise account. B) current account. C) capital account. D) A and C. ANSWER Answer: B
Date: September 19th, 2020
What is the subcategory in the current account that indicates that the government of a country and other residents gave more money to foreign countries and residents as gifts and grants than the country itself received from abroad? A) unilateral current transfers, net B) balance on goods and services C) balance on current account D) […]
Date: September 19th, 2020
A balance of trade deficit results in a current account A) deficit. B) surplus. C) IMF intervention. D) World Bank loan. ANSWER Answer: A
Date: September 19th, 2020
The purchases of goods and assets by foreign residents from domestic residents are ________ because they are a source of foreign exchange. ________ increase the supply of foreign money in the foreign exchange market. A) credit transactions B) current account transactions C) debit transactions D) capital account transactions ANSWER Answer: A
Date: September 19th, 2020
The accounting statement that summarizes all the economic transactions between residents of the home country and residents of all other countries is called the A) balance of trade. B) current account balance. C) balance of payments. D) capital account balance. ANSWER Answer: C
Date: September 19th, 2020
