Question 1

For Jane Jacobs,corporate mergers and acquisitions:

Accepted Answer

A) are an important way that free-enterprise economies ensure efficiency in their corporate sectors 
B) are economically beneficial as long as they involve businesses in different industries 
C) are economically beneficial as long as they involve businesses that were previously rivals 
D) are an example of a monstrous hybrid in which businesspeople begin acting like rulers 
E) promote efficiency as long as they involve businesses that were previously connected through the exchange of intermediate products 
A) are an important way that free-enterprise economies ensure efficiency in their corporate sectors 
B) are economically beneficial as long as they involve businesses in different industries 
C) are economically beneficial as long as they involve businesses that were previously rivals 
D) are an example of a monstrous hybrid in which businesspeople begin acting like rulers 
E) promote efficiency as long as they involve businesses that were previously connected through the exchange of intermediate products

Question 2

Under a system of flexible exchange rates,an increase in the international value of a nation's currency will:

Accepted Answer

A) cause a surplus of its currency 
B) contribute to disequilibrium in its balance of payments 
C) cause interest rates in that nation to rise 
D) cause its exports to rise 
E) cause its imports to rise 
A) cause a surplus of its currency 
B) contribute to disequilibrium in its balance of payments 
C) cause interest rates in that nation to rise 
D) cause its exports to rise 
E) cause its imports to rise

Question 3

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

$\begin{array} { | l | l | } 
\hline \text { Merchandise exports } & \$ 137 \
\hline \text { Merchandise imports } & - 128 \
\hline \text { Service exports } & + 20 \
\hline \text { Service imports } & - 26 \
\hline \text { Investment income } & - 18 \
\hline \text { Transfers } & + 4 \
\hline \text { Other financial investments } & - 3 \
\hline \text { Portfolio and direct } & + 12 \
\text { investments } & \
\hline \text { Capital account flows } & + 11 \
\hline \text { Changes in official reserves } & - 9 \
\hline
\end{array}$
-If a nation's merchandise exports are $55 billion,while its merchandise imports are $50 billion,we can conclude with certainty that this nation is experiencing a:

Accepted Answer

A) merchandise trade surplus 
B) balance-of-payments surplus 
C) positive current account balance 
D) positive balance of trade 
E) positive capital account balance 
A) merchandise trade surplus 
B) balance-of-payments surplus 
C) positive current account balance 
D) positive balance of trade 
E) positive capital account balance

Question 4

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 capital account and financial account balance shows a:

Accepted Answer

A) deficit of $10 billion 
B) surplus of $5 billion 
C) deficit of $28 billion 
D) surplus of $28 billion 
E) surplus of $10 billion 
A) deficit of $10 billion 
B) surplus of $5 billion 
C) deficit of $28 billion 
D) surplus of $28 billion 
E) surplus of $10 billion

Question 5

If Canada has full employment and the Canadian dollar dramatically depreciates in value,we can expect:

Accepted Answer

A) both our imports and our exports to rise 
B) both our imports and our exports to fall 
C) our exports to fall and our imports to rise 
D) unemployment to occur 
E) inflation to occur 
A) both our imports and our exports to rise 
B) both our imports and our exports to fall 
C) our exports to fall and our imports to rise 
D) unemployment to occur 
E) inflation to occur

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

$\begin{array} { | l | l | } 
\hline \text { Merchandise exports } & \$ 137 \
\hline \text { Merchandise imports } & - 128 \
\hline \text { Service exports } & + 20 \
\hline \text { Service imports } & - 26 \
\hline \text { Investment income } & - 18 \
\hline \text { Transfers } & + 4 \
\hline \text { Other financial investments } & - 3 \
\hline \text { Portfolio and direct } & + 12 \
\text { investments } & \
\hline \text { Capital account flows } & + 11 \
\hline \text { Changes in official reserves } & - 9 \
\hline
\end{array}$
-Which of the following is not included in the current account of a nation's balance of payments?

Accepted Answer

A) merchandise exports 
B) merchandise imports 
C) investment income 
D) service exports 
E) capital and financial inflows 
A) merchandise exports 
B) merchandise imports 
C) investment income 
D) service exports 
E) capital and financial inflows

Question 7

Under the managed float system of exchange rates:

Accepted Answer

A) all exchange rates vary with changes in the market price of gold 
B) industrialized nations meet once each year to negotiate readjustments in their exchange rates 
C) exchange rates are essentially flexible, but governments intervene to offset short-run or "disorderly" fluctuations in rates 
D) exchange rates are adjusted at the discretion of international monetary authorities 
E) exchange rates are based on quantities of gold 
A) all exchange rates vary with changes in the market price of gold 
B) industrialized nations meet once each year to negotiate readjustments in their exchange rates 
C) exchange rates are essentially flexible, but governments intervene to offset short-run or "disorderly" fluctuations in rates 
D) exchange rates are adjusted at the discretion of international monetary authorities 
E) exchange rates are based on quantities of gold

Question 8

A recession in Canada would most likely:

Accepted Answer

A) reduce a Canadian trade deficit 
B) increase a Canadian trade deficit 
C) increase the economic growth of our trading partners 
D) increase domestic interest rates 
E) cause a federal budget surplus 
A) reduce a Canadian trade deficit 
B) increase a Canadian trade deficit 
C) increase the economic growth of our trading partners 
D) increase domestic interest rates 
E) cause a federal budget surplus

Question 9

In considering pounds and Canadian dollars,we can say that when the price of pounds in terms of Canadian dollars rises:

Accepted Answer

A) the price of Canadian dollars in terms of pounds will fall 
B) the price of Canadian dollars in terms of pounds will also rise 
C) the price of Canadian dollars in terms of pounds may either fall or rise 
D) Canadian net exports to Britain will tend to fall 
E) there is no change in the price of Canadian dollars in terms of pounds 
A) the price of Canadian dollars in terms of pounds will fall 
B) the price of Canadian dollars in terms of pounds will also rise 
C) the price of Canadian dollars in terms of pounds may either fall or rise 
D) Canadian net exports to Britain will tend to fall 
E) there is no change in the price of Canadian dollars in terms of pounds

Question 10

Assume that,under a system of flexible exchange rates,Mexicans decide to increase their financial investment in Canada.As a result:

Accepted Answer

A) Canadians will want to buy fewer Mexican products at the new exchange rate 
B) the peso and the Canadian dollar will both depreciate in value 
C) the peso and the Canadian dollar will both appreciate in value 
D) the peso will depreciate and the Canadian dollar will appreciate in value 
E) there will be no change in the values of the two currencies 
A) Canadians will want to buy fewer Mexican products at the new exchange rate 
B) the peso and the Canadian dollar will both depreciate in value 
C) the peso and the Canadian dollar will both appreciate in value 
D) the peso will depreciate and the Canadian dollar will appreciate in value 
E) there will be no change in the values of the two currencies

Question 11

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

Accepted Answer

A) Kawasaki builds a motorcycle manufacturing plant in Vancouver 
B) Canadian tourists travel in large numbers to China 
C) a wealthy Iranian builds a mansion in Montreal 
D) Zaire pays interest on its debt to Canada 
E) a French consumer buys a Canadian-made telephone 
A) Kawasaki builds a motorcycle manufacturing plant in Vancouver 
B) Canadian tourists travel in large numbers to China 
C) a wealthy Iranian builds a mansion in Montreal 
D) Zaire pays interest on its debt to Canada 
E) a French consumer buys a Canadian-made telephone

For Jane Jacobs,corporate mergers and acquisitions:

Under a system of flexible exchange rates,an increase in the international value of a nation's currency will:

If Canada has full employment and the Canadian dollar dramatically depreciates in value,we can expect:

Under the managed float system of exchange rates:

A recession in Canada would most likely:

In considering pounds and Canadian dollars,we can say that when the price of pounds in terms of Canadian dollars rises:

Assume that,under a system of flexible exchange rates,Mexicans decide to increase their financial investment in Canada.As a result:

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

The Economic Problem

Demand and Supply

Elasticity

Costs of Production

Perfect Competition

Monopoly and Imperfect Competition

Economic Welfare and Income Distribution

Measures of Economic Activity

Inflation and Unemployment

Economic Fluctuations

Fiscal Policy

Money

Monetary Policy

Foreign Trade

Filters

Exam 14: The Foreign Sector

For Jane Jacobs,corporate mergers and acquisitions:

Under a system of flexible exchange rates,an increase in the international value of a nation's currency will:

If Canada has full employment and the Canadian dollar dramatically depreciates in value,we can expect:

Under the managed float system of exchange rates:

A recession in Canada would most likely:

In considering pounds and Canadian dollars,we can say that when the price of pounds in terms of Canadian dollars rises:

Assume that,under a system of flexible exchange rates,Mexicans decide to increase their financial investment in Canada.As a result:

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

The Economic Problem

Demand and Supply

Elasticity

Costs of Production

Perfect Competition

Monopoly and Imperfect Competition

Economic Welfare and Income Distribution

Measures of Economic Activity

Inflation and Unemployment

Economic Fluctuations

Fiscal Policy

Money

Monetary Policy

Foreign Trade

Filters