The following balance-of-payments data are for the hypothetical nation of Zabella. All figures are in billions of dollars. $\begin{array} { | l | c | } \hline \text { Merchandise exports } & + \$ 80 \\ \hline \text { Merchandise imports } & - 70 \\ \hline \text { Service exports } & + 20 \\ \hline \text { Service imports } & - 25 \\ \hline \text { Investment income } & + 5 \\ \hline \text { Transfers } & - 5 \\ \hline \text { Capital and financial inflows } & + 13 \\ \hline \begin{array} { l } \text { Capital and financial } \\ \text { outflows } \end{array} & - 23 \\ \hline \text { Changes in official reserves } & + 5 \\ \hline \end{array}$ -The changes in official reserves account indicates that Zabella:

A) added $5 billion to its stock of foreign currencies through sales of Zabellan dollars B) imported more merchandise than it exported C) reduced its stock of foreign currencies by $5 billion through purchases of Zabellan dollars D) experienced a balance-of-payments surplus E) exported more merchandise than it imported A) added $5 billion to its stock of foreign currencies through sales of Zabellan dollars B) imported more merchandise than it exported C) reduced its stock of foreign currencies by $5 billion through purchases of Zabellan dollars D) experienced a balance-of-payments surplus E) exported more merchandise than it imported C

The following table contains hypothetical data for Canada's balance of payments (the statistical discrepancy is assumed to be zero). All amounts are in billions of dollars $\begin{array} { | l | l | } \hline \text { Merchandise exports } & \$ 137 \\ \hline \text { Merchandise imports } & - 128 \\ \hline \text { Service exports } & + 20 \\ \hline \text { Service imports } & - 26 \\ \hline \text { Investment income } & - 18 \\ \hline \text { Transfers } & + 4 \\ \hline \text { Other financial investments } & - 3 \\ \hline \text { Portfolio and direct } & + 12 \\ \text { investments } & \\ \hline \text { Capital account flows } & + 11 \\ \hline \text { Changes in official reserves } & - 9 \\ \hline \end{array}$ -In the balance-of-payments of Canada,portfolio investment inflows are recorded as:

A) a positive entry B) a current account entry C) changes in official reserves D) investment income E) transfers A) a positive entry B) a current account entry C) changes in official reserves D) investment income E) transfers A

The following table contains hypothetical data for Canada's balance of payments (the statistical discrepancy is assumed to be zero). All amounts are in billions of dollars $\begin{array} { | l | l | } \hline \text { Merchandise exports } & \$ 137 \\ \hline \text { Merchandise imports } & - 128 \\ \hline \text { Service exports } & + 20 \\ \hline \text { Service imports } & - 26 \\ \hline \text { Investment income } & - 18 \\ \hline \text { Transfers } & + 4 \\ \hline \text { Other financial investments } & - 3 \\ \hline \text { Portfolio and direct } & + 12 \\ \text { investments } & \\ \hline \text { Capital account flows } & + 11 \\ \hline \text { Changes in official reserves } & - 9 \\ \hline \end{array}$ -In the balance-of-payments of Canada,merchandise imports are recorded as:

A) a positive entry B) a financial account entry C) a current account entry D) changes in official reserves E) transfers A) a positive entry B) a financial account entry C) a current account entry D) changes in official reserves E) transfers

The following balance-of-payments data are for the hypothetical nation of Zabella. All figures are in billions of dollars. $\begin{array} { | l | c | } \hline \text { Merchandise exports } & + \$ 80 \\ \hline \text { Merchandise imports } & - 70 \\ \hline \text { Service exports } & + 20 \\ \hline \text { Service imports } & - 25 \\ \hline \text { Investment income } & + 5 \\ \hline \text { Transfers } & - 5 \\ \hline \text { Capital and financial inflows } & + 13 \\ \hline \begin{array} { l } \text { Capital and financial } \\ \text { outflows } \end{array} & - 23 \\ \hline \text { Changes in official reserves } & + 5 \\ \hline \end{array}$ -Zabella is experiencing a merchandise trade:

A) deficit of $10 billion B) surplus of $5 billion C) surplus of $10 billion D) deficit of $5 billion E) deficit of $15 billion A) deficit of $10 billion B) surplus of $5 billion C) surplus of $10 billion D) deficit of $5 billion E) deficit of $15 billion

-A shift of the demand curve from D0 to D1 and the supply curve from S0 to S1 might be the result of a(n):

A) relative decline of interest rates in Britain B) lower inflation rate in Canada than in Britain C) improvement in the quality of Canadian products D) relative decline in interest rates in Canada E) belief by speculators that the value of the Canadian dollar will soon rise A) relative decline of interest rates in Britain B) lower inflation rate in Canada than in Britain C) improvement in the quality of Canadian products D) relative decline in interest rates in Canada E) belief by speculators that the value of the Canadian dollar will soon rise

The following balance-of-payments data are for the hypothetical nation of Zabella. All figures are in billions of dollars. $\begin{array} { | l | c | } \hline \text { Merchandise exports } & + \$ 80 \\ \hline \text { Merchandise imports } & - 70 \\ \hline \text { Service exports } & + 20 \\ \hline \text { Service imports } & - 25 \\ \hline \text { Investment income } & + 5 \\ \hline \text { Transfers } & - 5 \\ \hline \text { Capital and financial inflows } & + 13 \\ \hline \begin{array} { l } \text { Capital and financial } \\ \text { outflows } \end{array} & - 23 \\ \hline \text { Changes in official reserves } & + 5 \\ \hline \end{array}$ -Zabella's balance of trade shows a:

A) $5 billion deficit B) $5 billion surplus C) $10 billion surplus D) $10 billion deficit E) $15 billion deficit A) $5 billion deficit B) $5 billion surplus C) $10 billion surplus D) $10 billion deficit E) $15 billion deficit

The following table contains hypothetical data for Canada's balance of payments (the statistical discrepancy is assumed to be zero). All amounts are in billions of dollars $\begin{array} { | l | l | } \hline \text { Merchandise exports } & \$ 137 \\ \hline \text { Merchandise imports } & - 128 \\ \hline \text { Service exports } & + 20 \\ \hline \text { Service imports } & - 26 \\ \hline \text { Investment income } & - 18 \\ \hline \text { Transfers } & + 4 \\ \hline \text { Other financial investments } & - 3 \\ \hline \text { Portfolio and direct } & + 12 \\ \text { investments } & \\ \hline \text { Capital account flows } & + 11 \\ \hline \text { Changes in official reserves } & - 9 \\ \hline \end{array}$ -Canada had a current account:

A) surplus of $3 billion B) surplus of $7 billion C) deficit of $7 billion D) surplus of $11 billion E) deficit of $11 billion A) surplus of $3 billion B) surplus of $7 billion C) deficit of $7 billion D) surplus of $11 billion E) deficit of $11 billion

The following balance-of-payments data are for the hypothetical nation of Zabella. All figures are in billions of dollars. $\begin{array} { | l | c | } \hline \text { Merchandise exports } & + \$ 80 \\ \hline \text { Merchandise imports } & - 70 \\ \hline \text { Service exports } & + 20 \\ \hline \text { Service imports } & - 25 \\ \hline \text { Investment income } & + 5 \\ \hline \text { Transfers } & - 5 \\ \hline \text { Capital and financial inflows } & + 13 \\ \hline \begin{array} { l } \text { Capital and financial } \\ \text { outflows } \end{array} & - 23 \\ \hline \text { Changes in official reserves } & + 5 \\ \hline \end{array}$ -Zabella is experiencing a balance-of-payments:

A) surplus of $5 billion B) surplus of $10 billion C) deficit of $10 billion D) deficit of $15 billion E) deficit of $5 billion A) surplus of $5 billion B) surplus of $10 billion C) deficit of $10 billion D) deficit of $15 billion E) deficit of $5 billion

The following table contains hypothetical data for Canada's balance of payments (the statistical discrepancy is assumed to be zero). All amounts are in billions of dollars $\begin{array} { | l | l | } \hline \text { Merchandise exports } & \$ 137 \\ \hline \text { Merchandise imports } & - 128 \\ \hline \text { Service exports } & + 20 \\ \hline \text { Service imports } & - 26 \\ \hline \text { Investment income } & - 18 \\ \hline \text { Transfers } & + 4 \\ \hline \text { Other financial investments } & - 3 \\ \hline \text { Portfolio and direct } & + 12 \\ \text { investments } & \\ \hline \text { Capital account flows } & + 11 \\ \hline \text { Changes in official reserves } & - 9 \\ \hline \end{array}$ -Canada had a balance-of-payments:

A) deficit of $9 billion B) surplus of $11 billion C) deficit of $11 billion D) surplus of $15 billion E) surplus of $9 billion A) deficit of $9 billion B) surplus of $11 billion C) deficit of $11 billion D) surplus of $15 billion E) surplus of $9 billion

-Under a system of fixed exchange rates,the shift in demand from D0 to D1 and in supply from S0 to S1 will cause:

A) no change in Canada's stocks of international monetary reserves B) a British balance-of-payments deficit C) a Canadian balance-of-payments deficit D) a Canadian balance-of-payments surplus E) an immediate fall in the value of the Canadian dollar A) no change in Canada's stocks of international monetary reserves B) a British balance-of-payments deficit C) a Canadian balance-of-payments deficit D) a Canadian balance-of-payments surplus E) an immediate fall in the value of the Canadian dollar

Exam 14: The Foreign Sector

The following balance-of-payments data are for the hypothetical nation of Zabella. All figures are in billions of dollars. Merchandise exports +\ 80 Merchandise imports -70 Service exports +20 Service imports -25 Investment income +5 Transfers -5 Capital and financial inflows +13 Capital and financial outflows -23 Changes in official reserves +5 -The changes in official reserves account indicates that Zabella:

Free

(Multiple Choice)

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(36)

Question 1

Correct Answer:

Verified

C

The following table contains hypothetical data for Canada's balance of payments (the statistical discrepancy is assumed to be zero). All amounts are in billions of dollars Merchandise exports \ 137 Merchandise imports -128 Service exports +20 Service imports -26 Investment income -18 Transfers +4 Other financial investments -3 Portfolio and direct +12 investments Capital account flows +11 Changes in official reserves -9 -In the balance-of-payments of Canada,portfolio investment inflows are recorded as:

Free

(Multiple Choice)

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(29)

Question 2

Correct Answer:

Verified

A

Which of the following would call for a monetary inflow into the Canadian economy?

Free

(Multiple Choice)

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Question 3

Correct Answer:

Verified

B

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

(Multiple Choice)

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Question 4

An expanding Canadian current account deficit:

(Multiple Choice)

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Question 5

If the exchange rate between the Canadian dollar and the Japanese yen is $1 = 200 yen,then the dollar price of yen is:

(Multiple Choice)

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Question 6

The following table contains hypothetical data for Canada's balance of payments (the statistical discrepancy is assumed to be zero). All amounts are in billions of dollars Merchandise exports \ 137 Merchandise imports -128 Service exports +20 Service imports -26 Investment income -18 Transfers +4 Other financial investments -3 Portfolio and direct +12 investments Capital account flows +11 Changes in official reserves -9 -In the balance-of-payments of Canada,merchandise imports are recorded as:

(Multiple Choice)

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(39)

Question 7

The following balance-of-payments data are for the hypothetical nation of Zabella. All figures are in billions of dollars. Merchandise exports +\ 80 Merchandise imports -70 Service exports +20 Service imports -25 Investment income +5 Transfers -5 Capital and financial inflows +13 Capital and financial outflows -23 Changes in official reserves +5 -Zabella is experiencing a merchandise trade:

(Multiple Choice)

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Question 8

If a nation's current account balance is -$20 billion,while its capital and financial account balance is +$17.5 billion,we can conclude with certainty that this nation is experiencing a:

(Multiple Choice)

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Question 9

-A shift of the demand curve from D₀ to D₁ and the supply curve from S₀ to S₁ might be the result of a(n):

(Multiple Choice)

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Question 10

The following balance-of-payments data are for the hypothetical nation of Zabella. All figures are in billions of dollars. Merchandise exports +\ 80 Merchandise imports -70 Service exports +20 Service imports -25 Investment income +5 Transfers -5 Capital and financial inflows +13 Capital and financial outflows -23 Changes in official reserves +5 -Zabella's balance of trade shows a:

(Multiple Choice)

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Question 11

If the equilibrium exchange rate changes so that more British pounds are required to buy a Canadian dollar,then:

(Multiple Choice)

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Question 12

The following table contains hypothetical data for Canada's balance of payments (the statistical discrepancy is assumed to be zero). All amounts are in billions of dollars Merchandise exports \ 137 Merchandise imports -128 Service exports +20 Service imports -26 Investment income -18 Transfers +4 Other financial investments -3 Portfolio and direct +12 investments Capital account flows +11 Changes in official reserves -9 -Canada had a current account:

(Multiple Choice)

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Question 13

Suppose interest rates fall sharply in Canada but are unchanged in Great Britain.Ceteris paribus,under a system of flexible exchange rates,we can expect the British demand for Canadian dollars to:

(Multiple Choice)

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Question 14

The following balance-of-payments data are for the hypothetical nation of Zabella. All figures are in billions of dollars. Merchandise exports +\ 80 Merchandise imports -70 Service exports +20 Service imports -25 Investment income +5 Transfers -5 Capital and financial inflows +13 Capital and financial outflows -23 Changes in official reserves +5 -Zabella is experiencing a balance-of-payments:

(Multiple Choice)

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(40)

Question 15

The following table contains hypothetical data for Canada's balance of payments (the statistical discrepancy is assumed to be zero). All amounts are in billions of dollars Merchandise exports \ 137 Merchandise imports -128 Service exports +20 Service imports -26 Investment income -18 Transfers +4 Other financial investments -3 Portfolio and direct +12 investments Capital account flows +11 Changes in official reserves -9 -Canada had a balance-of-payments:

(Multiple Choice)

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Question 16

According to Jane Jacobs,cities achieve long-lasting prosperity mainly by:

(Multiple Choice)

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Question 17

If the rate of exchange for a British pound is $2 in Canadian currency,the rate of exchange for the Canadian dollar:

(Multiple Choice)

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Question 18

Which of the following leads to a positive receipt in Canada's balance-of-payments accounts?

(Multiple Choice)

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Question 19

-Under a system of fixed exchange rates,the shift in demand from D₀ to D₁ and in supply from S₀ to S₁ will cause:

(Multiple Choice)

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Question 20

Which of the following would call for a monetary inflow into the Canadian economy?

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

An expanding Canadian current account deficit:

If the exchange rate between the Canadian dollar and the Japanese yen is $1 = 200 yen,then the dollar price of yen is:

If a nation's current account balance is -$20 billion,while its capital and financial account balance is +$17.5 billion,we can conclude with certainty that this nation is experiencing a:

-A shift of the demand curve from D₀ to D₁ and the supply curve from S₀ to S₁ might be the result of a(n):

If the equilibrium exchange rate changes so that more British pounds are required to buy a Canadian dollar,then:

Suppose interest rates fall sharply in Canada but are unchanged in Great Britain.Ceteris paribus,under a system of flexible exchange rates,we can expect the British demand for Canadian dollars to:

According to Jane Jacobs,cities achieve long-lasting prosperity mainly by:

If the rate of exchange for a British pound is $2 in Canadian currency,the rate of exchange for the Canadian dollar:

Which of the following leads to a positive receipt in Canada's balance-of-payments accounts?

-Under a system of fixed exchange rates,the shift in demand from D₀ to D₁ and in supply from S₀ to S₁ will cause:

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