Exam 4: The Balance of Payments

The __________ account consists of three components: direct investment,portfolio investment,and other asset investments.

The ___________ account makes sure the balance of payments actually balances

The ___________ account records the results of transactions involving merchandise,services,and unilateral transfers between countries.

When capital flows into the United States,it enters the U.S.balance of payments as a positive cash flow.

The __________ account of the BOP shows the change in the amount of funds immediately available to a country for making international payments and the borrowing and lending that has taken place between the monetary authorities of different countries.

Which of the following transactions should NOT be included on the U.S.balance of payments?

A country that is experiencing rapidly expanding current account deficits will simultaneously build financial account surpluses.

According to Obstfeld and Taylor,which era was characterized by floating exchange rates,economic volatility,and rapidly expanding cross-border capital flows?

Joseph is a small-time crook who decides to smuggle money in his carry-on luggage during a flight from South Africa to Moscow. This is an example of what type of transfer of capital?

__________ refers to legal restraints on what a foreign investor may own or control in another country.

The current account records the results of transactions involving merchandise,services,and unilateral transfers between countries.

Rather than declaring that a currency is convertible into a fixed amount of some other currency,the exchange rate for the Canadian dollar instead fluctuates based on supply and demand. Canada uses what type of exchange rate?

___________ refers specifically to the balance of exports and imports of goods trade only.

________ refers to legal restraints on what a foreign investor may own or control in another country.

Services trade is the oldest and most traditional form of international economic activity.

The capital account consists of three components: direct investment,portfolio investment,and other asset investment.

__________ is the net balance of capital that flows in and out of the United States not reaching the 10 percent ownership threshold.

As a result of the global financial crisis in 2008 and 2009,the U.S.government was often criticized for "bailing out" large financial institutions. Such bailouts are examples of:

Corporate socialism refers to the fact that most companies in East Asia are often largely controlled by families or groups related to the governing party or the body of the country.

________ is a statement of all transactions between one country and the rest of the world during a given period.