Exam 2: International Flow of Funds

As a result of the European Union, restrictions on exports between ____ were reduced or eliminated.

The Central American Trade Agreement (CAFTA) is intended to raise tariffs and regulations between the United States, the Dominican Republic, and Central American countries.

Exporting of products by one country to other countries at prices below cost is called elasticity.

​Over the last several years, international trade has generally:

An American tourist visiting Germany and spending money there (for lodging, food, etc.) will reduce the U.S. current account deficit and reduce Germany's current account balance.

​An increase in the current account deficit will place ____ pressure on the home currency value, other things being equal.

​____ purchases more U.S. exports than the other countries listed here.

The current account represents the investment in fixed assets in foreign countries that can be used to conduct business operations.

​Which of the following is a key component that determines a country's primary income (within the country's current account)?

A weakening of the U.S. dollar with respect to the British pound would likely reduce U.S. exports to Britain and increase U.S. imports from Britain over time.

The ____, an accord among 117 nations, called for lower tariffs around the world.

If a country's government imposes a tariff on imported goods, that country's current account balance will likely ____ (assuming no retaliation by other governments).

A balance-of-trade surplus indicates an excess of imports over exports.

​Which of the following countries purchases the largest amount of exports by U.S. firms?

​According to the "J-curve effect," a weakening of the U.S. dollar relative to its trading partners' currencies would result in an initial ____ in the current account balance, followed by a subsequent ____ in the current account balance.

​Assume the United States has a balance-of-trade surplus with the country of Thor. When individuals in Thor without permission manufacture video games and DVDs that look almost exactly like the original products produced in the United States and other countries, they ____ the U.S. balance-of-trade surplus with Thor. This activity is called ____.

The value of financial assets transferred across country borders by people who move to a different country is included in the balance of payments in the capital account.

Which of the following statements is not true?

​Recently, the U.S. experienced an annual balance of trade representing a ____.

​The General Agreement on Tariffs and Trade (GATT) accord of 1993 called for: