Exam 10: The Balance of Payments

On the balance-of-payments statement, a capital inflow can be likened to the import of goods and services.

The goods and services account of the balance-of-payments shows the monetary value of international flows associated with transactions in goods, services, and unilateral transfers.

Unilateral transfers consist of private-sector transfers, such as church contributions to alleviate starvation in Africa, as well as governmental transfers, such as foreign aid.

Most economists believe that in the 1980s, a massive outflow of capital caused a current account deficit for the United States.

On the balance-of-payments statement, dividend and interest income are classified as capital-account transactions.

According to researchers at the Federal Reserve, the loss of jobs associated with a deficit in the current account tends to be

A debit transaction would appear on the balance-of-payments as a result of

Which of the following supports China's argument for having the SDR become a reserve currency?

Concerning the balance-of-payments, a current account deficit results in a worsening of a country's net foreign investment position.

Credit items on the U.S.balance-of-payments statement result in

If the United States government sells military hardware to Saudi Arabia, the transaction would be recorded on the U.S.balance-of-payments as a

The balance-of-payments refers to the stock of trade and investment transactions that exists at a particular point in time.

U.S.military aid granted to foreign countries is entered in the

One problem of adopting the special drawing right (SDR) as a reserve currency is that the SDR is backed by nothing other than the good faith and credit of the International Monetary Fund (IMF)-that is, the IMF produces nothing to support the value of the SDR.

About 25 percent of the world's official foreign exchange reserves are held in U.S.dollars.

For the U.S.balance-of-payments statement, which of the following is NOT recorded in the capital and financial account?

If an American purchases a ticket from Scandinavian Airlines, paying by a personal check, which of the following entries would be the result?

Concerning the balance-of-payments, the goods and services balance is commonly referred to as the "trade balance" by the news media.

Often, countries realizing rapid economic growth rates possess long-run current account deficits.

Because the balance-of-payments utilizes double entry accounting, merchandise exports will always be in balance with merchandise imports.