Question 1

The demand for U.S.dollars by foreign nations increases as:​

Accepted Answer

A) more Americans travel abroad. 
B) foreigners increase their purchase of American goods. 
C) Americans increase their purchase of foreign goods. 
D) Americans increase their investments in foreign stocks or bonds. 
E) Americans send more gifts abroad. 
A) more Americans travel abroad. 
B) foreigners increase their purchase of American goods. 
C) Americans increase their purchase of foreign goods. 
D) Americans increase their investments in foreign stocks or bonds. 
E) Americans send more gifts abroad. B

Question 2

The balance of payments always balances because each of the specific accounts must,by definition,be in balance.​

Accepted Answer

A) True 
 B)False  False

Question 3

The foreign exchange rate is:​

Accepted Answer

A) an entry in the current account. 
B) the price of a foreign good in the world market. 
C) an entry in the capital account. 
D) an entry in the balance of trade. 
E) the cost of one currency in terms of another. 
A) an entry in the current account. 
B) the price of a foreign good in the world market. 
C) an entry in the capital account. 
D) an entry in the balance of trade. 
E) the cost of one currency in terms of another. E

Question 4

Which of the following statements defines trade balance?​

Accepted Answer

A) The trade balance is the sum of the services balance,the current account balance,and the capital account balance. 
B) The trade balance is merchandise exports minus merchandise imports. 
C) The trade balance is the sum of the current account balance and the capital account balance. 
D) The trade balance is foreign purchases of domestic assets minus domestic purchases of foreign assets. 
E) The trade balance is the sum of the services balance and the capital account balance. 
A) The trade balance is the sum of the services balance,the current account balance,and the capital account balance. 
B) The trade balance is merchandise exports minus merchandise imports. 
C) The trade balance is the sum of the current account balance and the capital account balance. 
D) The trade balance is foreign purchases of domestic assets minus domestic purchases of foreign assets. 
E) The trade balance is the sum of the services balance and the capital account balance.

Question 5

A speculator in foreign exchange is a person who:​

Accepted Answer

A) buys foreign currency,hoping to profit by selling it at a higher exchange rate at some later date. 
B) earns illegal profit by manipulating foreign exchange. 
C) causes differences in exchange rates in different geographic markets. 
D) simultaneously buys large amounts of a currency in one market and sells it in another market. 
E) takes no risks in foreign currency exchanges. 
A) buys foreign currency,hoping to profit by selling it at a higher exchange rate at some later date. 
B) earns illegal profit by manipulating foreign exchange. 
C) causes differences in exchange rates in different geographic markets. 
D) simultaneously buys large amounts of a currency in one market and sells it in another market. 
E) takes no risks in foreign currency exchanges.

Question 6

The exchange rate is:​

Accepted Answer

A) the price of foreign exchange determined by the interaction of supply and demand. 
B) an interest rate for foreign loans determined by the interaction of supply and demand. 
C) fixed by each government separately. 
D) always fixed for any two currencies by the two nations involved,regardless of any agreements made with other nations. 
E) fixed by GATT. 
A) the price of foreign exchange determined by the interaction of supply and demand. 
B) an interest rate for foreign loans determined by the interaction of supply and demand. 
C) fixed by each government separately. 
D) always fixed for any two currencies by the two nations involved,regardless of any agreements made with other nations. 
E) fixed by GATT.

Question 7

The present international exchange rate system operates on the gold standard.​

Accepted Answer

A) True 
 B)False

Question 8

In order for the balance of payments to balance,the:​

Accepted Answer

A) current account balance must equal the capital account balance. 
B) sum of the current account balance,the capital account balance,the net flow of international reserves,and the statistical discrepancy must have a negative value. 
C) sum of the current account balance,the capital account balance,the net flow of international reserves,and the statistical discrepancy must have a positive value. 
D) sum of the current account balance,the capital account balance,the net flow of international reserves,and the statistical discrepancy must equal zero. 
E) the sum of the current account balance,the capital account balance,and the net flow of international reserves must be greater than the statistical discrepancy. 
A) current account balance must equal the capital account balance. 
B) sum of the current account balance,the capital account balance,the net flow of international reserves,and the statistical discrepancy must have a negative value. 
C) sum of the current account balance,the capital account balance,the net flow of international reserves,and the statistical discrepancy must have a positive value. 
D) sum of the current account balance,the capital account balance,the net flow of international reserves,and the statistical discrepancy must equal zero. 
E) the sum of the current account balance,the capital account balance,and the net flow of international reserves must be greater than the statistical discrepancy.

Question 9

Suppose U.S.consumers start buying more English shoes and fewer American shoes.Which of the following will be a likely impact on the foreign exchange market?​

Accepted Answer

A) U.S.demand for British pounds will increase. 
B) U.S.demand for British pounds will decrease. 
C) U.S.demand for British pounds will increase,but the demand for foreign exchange will decrease. 
D) U.S.demand for British pounds will decrease,but the demand for foreign exchange will increase. 
E) There would be no effect on the demand for foreign exchange in the U.S. 
A) U.S.demand for British pounds will increase. 
B) U.S.demand for British pounds will decrease. 
C) U.S.demand for British pounds will increase,but the demand for foreign exchange will decrease. 
D) U.S.demand for British pounds will decrease,but the demand for foreign exchange will increase. 
E) There would be no effect on the demand for foreign exchange in the U.S.

Question 10

Under the gold standard,each country had little control over its own monetary policies.​

Accepted Answer

A) True 
 B)False

Question 11

If the current account is in deficit,imports of goods and services exceed exports of goods and services,plus net unilateral transfers.​

Accepted Answer

A) True 
 B)False

Question 12

A German national who exchanges euros for dollars at a U.S.airport is:​

Accepted Answer

A) contributing to U.S.exports of merchandise. 
B) lending dollars to Germany. 
C) participating in the foreign exchange market. 
D) engaging in speculative activities. 
E) engaging in illegal activities. 
A) contributing to U.S.exports of merchandise. 
B) lending dollars to Germany. 
C) participating in the foreign exchange market. 
D) engaging in speculative activities. 
E) engaging in illegal activities.

Question 13

In 2014,the United States had the largest merchandise trade deficit with:​

Accepted Answer

A) the European Union. 
B) Canada. 
C) China. 
D) Mexico. 
E) Brazil. 
A) the European Union. 
B) Canada. 
C) China. 
D) Mexico. 
E) Brazil.

Question 14

Managed float means:​

Accepted Answer

A) a fixed exchange rate system with regularly scheduled periodic devaluations. 
B) a freely floating exchange rate system. 
C) a combination of freely floating exchange rates with occasional intervention by central banks. 
D) a fixed exchange rate system managed by the European Community. 
E) a flexible exchange rate system managed entirely by the IMF. 
A) a fixed exchange rate system with regularly scheduled periodic devaluations. 
B) a freely floating exchange rate system. 
C) a combination of freely floating exchange rates with occasional intervention by central banks. 
D) a fixed exchange rate system managed by the European Community. 
E) a flexible exchange rate system managed entirely by the IMF.

Question 15

Net unilateral transfers in the United States have been:​

Accepted Answer

A) positive every year since 1950. 
B) negative every year since 1950. 
C) positive every year since 1950 except in 1991 during the Persian Gulf War. 
D) negative every year since 1950 except in 1991 during the Persian Gulf War. 
E) positive about half the time and negative about half the time since 1950. 
A) positive every year since 1950. 
B) negative every year since 1950. 
C) positive every year since 1950 except in 1991 during the Persian Gulf War. 
D) negative every year since 1950 except in 1991 during the Persian Gulf War. 
E) positive about half the time and negative about half the time since 1950.

Question 16

Flexible exchange rates do not allow for discretionary monetary policy.​

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is a credit item in the U.S.balance of payments?​

Accepted Answer

A) Imports of cars from Japan 
B) Purchase of an American car by a Japanese citizen 
C) Purchase of Chinese assets by an American citizen 
D) An American firm's purchase of steel from a European steel mill 
E) An increase in American tourists abroad 
A) Imports of cars from Japan 
B) Purchase of an American car by a Japanese citizen 
C) Purchase of Chinese assets by an American citizen 
D) An American firm's purchase of steel from a European steel mill 
E) An increase in American tourists abroad

Question 18

The current account reflects:​

Accepted Answer

A) trade in only tangible products. 
B) trade in goods as well as services. 
C) trade in services only. 
D) the purchase of securities from foreigners. 
E) the sale of securities to foreigners. 
A) trade in only tangible products. 
B) trade in goods as well as services. 
C) trade in services only. 
D) the purchase of securities from foreigners. 
E) the sale of securities to foreigners.

Question 19

The merchandise trade balance measures:​

Accepted Answer

A) the value of goods and services exported. 
B) the value of all goods and services exported minus the value of all goods and services imported. 
C) the value of all goods and services exported minus the value of all goods and services imported,and the transactions to finance the difference. 
D) the value of all tangible products exported minus the value of all tangible products imported. 
E) the value of all tangible products exported minus the value of all tangible products imported,and the transactions to finance the difference. 
A) the value of goods and services exported. 
B) the value of all goods and services exported minus the value of all goods and services imported. 
C) the value of all goods and services exported minus the value of all goods and services imported,and the transactions to finance the difference. 
D) the value of all tangible products exported minus the value of all tangible products imported. 
E) the value of all tangible products exported minus the value of all tangible products imported,and the transactions to finance the difference.

Question 20

If Europe and the United States were the only two regions in the world,then U.S.government would buy euros to improve the U.S.balance of payments.​

Accepted Answer

A) True 
 B)False

The demand for U.S.dollars by foreign nations increases as:

The balance of payments always balances because each of the specific accounts must,by definition,be in balance.

The foreign exchange rate is:

Which of the following statements defines trade balance?

A speculator in foreign exchange is a person who:

The exchange rate is:

The present international exchange rate system operates on the gold standard.

In order for the balance of payments to balance,the:

Suppose U.S.consumers start buying more English shoes and fewer American shoes.Which of the following will be a likely impact on the foreign exchange market?

Under the gold standard,each country had little control over its own monetary policies.

If the current account is in deficit,imports of goods and services exceed exports of goods and services,plus net unilateral transfers.

A German national who exchanges euros for dollars at a U.S.airport is:

In 2014,the United States had the largest merchandise trade deficit with:

Managed float means:

Net unilateral transfers in the United States have been:

Flexible exchange rates do not allow for discretionary monetary policy.

Which of the following is a credit item in the U.S.balance of payments?

The current account reflects:

The merchandise trade balance measures:

If Europe and the United States were the only two regions in the world,then U.S.government would buy euros to improve the U.S.balance of payments.

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

Economic Development

Filters

Exam 18: International Finance

The demand for U.S.dollars by foreign nations increases as:​

The balance of payments always balances because each of the specific accounts must,by definition,be in balance.​

The foreign exchange rate is:​

Which of the following statements defines trade balance?​

A speculator in foreign exchange is a person who:​

The exchange rate is:​

The present international exchange rate system operates on the gold standard.​

In order for the balance of payments to balance,the:​

Suppose U.S.consumers start buying more English shoes and fewer American shoes.Which of the following will be a likely impact on the foreign exchange market?​

Under the gold standard,each country had little control over its own monetary policies.​

If the current account is in deficit,imports of goods and services exceed exports of goods and services,plus net unilateral transfers.​

A German national who exchanges euros for dollars at a U.S.airport is:​

In 2014,the United States had the largest merchandise trade deficit with:​

Managed float means:​

Net unilateral transfers in the United States have been:​

Flexible exchange rates do not allow for discretionary monetary policy.​

Which of the following is a credit item in the U.S.balance of payments?​

The current account reflects:​

The merchandise trade balance measures:​

If Europe and the United States were the only two regions in the world,then U.S.government would buy euros to improve the U.S.balance of payments.​

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

Economic Development

Filters

The demand for U.S.dollars by foreign nations increases as:

The balance of payments always balances because each of the specific accounts must,by definition,be in balance.

The foreign exchange rate is:

Which of the following statements defines trade balance?

A speculator in foreign exchange is a person who:

The exchange rate is:

The present international exchange rate system operates on the gold standard.

In order for the balance of payments to balance,the:

Suppose U.S.consumers start buying more English shoes and fewer American shoes.Which of the following will be a likely impact on the foreign exchange market?

Under the gold standard,each country had little control over its own monetary policies.

If the current account is in deficit,imports of goods and services exceed exports of goods and services,plus net unilateral transfers.

A German national who exchanges euros for dollars at a U.S.airport is:

In 2014,the United States had the largest merchandise trade deficit with:

Managed float means:

Net unilateral transfers in the United States have been:

Flexible exchange rates do not allow for discretionary monetary policy.

Which of the following is a credit item in the U.S.balance of payments?

The current account reflects:

The merchandise trade balance measures:

If Europe and the United States were the only two regions in the world,then U.S.government would buy euros to improve the U.S.balance of payments.