Question 1

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 2

If an American citizen is planning to visit wildlife reserves in Kenya,he will hope that the U.S.dollar appreciates against Kenyan shillings.

Accepted Answer

A) True 
 B)False

Question 3

Current account transactions are records of the income and expenditures from exports and imports,plus international financial investments and borrowing.

Accepted Answer

A) True 
 B)False

Question 4

If the dollar per pound exchange rate falls from $1.50 per pound to $1.25 per pound,______.

Accepted Answer

A) U.S.imports of British goods will increase 
B) U.S.exports of goods to Great Britain will increase 
C) U.S.exports of services to Great Britain will fall because the price of the pound has increased 
D) British demand for American goods will remain unchanged,but American demand for British goods will fall 
E) U.S.demand for British goods will remain unchanged,but British demand for American goods will increase 
A) U.S.imports of British goods will increase 
B) U.S.exports of goods to Great Britain will increase 
C) U.S.exports of services to Great Britain will fall because the price of the pound has increased 
D) British demand for American goods will remain unchanged,but American demand for British goods will fall 
E) U.S.demand for British goods will remain unchanged,but British demand for American goods will increase

Question 5

When net unilateral transfers are added to the net exports of goods and services,the result is called the:

Accepted Answer

A) merchandise trade balance. 
B) official reserve transactions account. 
C) balance of payments. 
D) balance on capital account. 
E) balance on current account. 
A) merchandise trade balance. 
B) official reserve transactions account. 
C) balance of payments. 
D) balance on capital account. 
E) balance on current account.

Question 6

The Bretton Woods system collapsed because:

Accepted Answer

A) the world economy was unhealthy. 
B) the collapse of world gold production undermined the operation of the system. 
C) the dollar was undervalued. 
D) the dollar was overvalued. 
E) the ten richest countries in the world refused to cooperate. 
A) the world economy was unhealthy. 
B) the collapse of world gold production undermined the operation of the system. 
C) the dollar was undervalued. 
D) the dollar was overvalued. 
E) the ten richest countries in the world refused to cooperate.

Question 7

A drop in the dollar price of British pounds implies that:

Accepted Answer

A) fewer U.S.dollars are needed to buy British pounds. 
B) more dollars are needed to buy British pounds. 
C) the pound has appreciated. 
D) the dollar has depreciated. 
E) British goods are now more expensive to Americans. 
A) fewer U.S.dollars are needed to buy British pounds. 
B) more dollars are needed to buy British pounds. 
C) the pound has appreciated. 
D) the dollar has depreciated. 
E) British goods are now more expensive to Americans.

Question 8

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.

Question 9

A nation has an unfavorable balance of trade when:

Accepted Answer

A) it has a surplus in its balance of payments. 
B) it has a deficit in its balance of payments. 
C) the value of its imports of goods is greater than the value of its exports of goods. 
D) its current account is in surplus and its capital account is in deficit. 
E) it has high tariffs. 
A) it has a surplus in its balance of payments. 
B) it has a deficit in its balance of payments. 
C) the value of its imports of goods is greater than the value of its exports of goods. 
D) its current account is in surplus and its capital account is in deficit. 
E) it has high tariffs.

Question 10

The current international financial system is a managed float system.

Accepted Answer

A) True 
 B)False

Question 11

Under the Bretton Woods agreement,the world monetary system operated exactly like the gold standard of pre-World War I years.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is true concerning unilateral transfers in the U.S.balance of payments?

Accepted Answer

A) Unilateral transfers have been positive since World War II. 
B) Unilateral transfers have been negative since World War II. 
C) Unilateral transfers have been negative every year since World War II except during the war in Iraq. 
D) The United States places tight restrictions on its currency being sent out of the country. 
E) Developing countries ordinarily place no restrictions on its currency being sent out of their countries. 
A) Unilateral transfers have been positive since World War II. 
B) Unilateral transfers have been negative since World War II. 
C) Unilateral transfers have been negative every year since World War II except during the war in Iraq. 
D) The United States places tight restrictions on its currency being sent out of the country. 
E) Developing countries ordinarily place no restrictions on its currency being sent out of their countries.

Question 13

The reason the current exchange rate system is called a "managed float" is that:

Accepted Answer

A) it is managed by the IMF. 
B) it is basically a misnomer. 
C) it recognizes that there will be some intervention by central banks. 
D) only the forces of supply and demand determine the exchange rates. 
E) Congress passed a law declaring that the exchange rate system be legally termed "managed float." 
A) it is managed by the IMF. 
B) it is basically a misnomer. 
C) it recognizes that there will be some intervention by central banks. 
D) only the forces of supply and demand determine the exchange rates. 
E) Congress passed a law declaring that the exchange rate system be legally termed "managed float."

Question 14

A country's investment earnings from foreign assets minus foreigners' earnings from their assets in the country is called _____.

Accepted Answer

A) the merchandise trade balance 
B) net unilateral transfers abroad 
C) the balance on good and services 
D) net investment income from abroad 
E) the financial account balance 
A) the merchandise trade balance 
B) net unilateral transfers abroad 
C) the balance on good and services 
D) net investment income from abroad 
E) the financial account balance

Question 15

Speculators profit by taking risks,while the actions of arbitrageurs involve no risk.

Accepted Answer

A) True 
 B)False

Question 16

The debit side of the current account includes the imports of _____.

Accepted Answer

A) goods only 
B) goods and services 
C) services only 
D) services and resources only 
E) financial assets 
A) goods only 
B) goods and services 
C) services only 
D) services and resources only 
E) financial assets

Question 17

If the exchange rate changes from 75 cents per euro to $1 per euro,the euro has:

Accepted Answer

A) appreciated,since its value has increased. 
B) appreciated,since the price of U.S.dollars has increased. 
C) appreciated,making U.S.goods more expensive in European nations. 
D) depreciated,since its value has declined. 
E) depreciated,since its value has increased. 
A) appreciated,since its value has increased. 
B) appreciated,since the price of U.S.dollars has increased. 
C) appreciated,making U.S.goods more expensive in European nations. 
D) depreciated,since its value has declined. 
E) depreciated,since its value has increased.

Question 18

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 19

A country's balance of payments summarizes all economic transactions during a given period between the residents of that country and the residents of other countries.

Accepted Answer

A) True 
 B)False

Question 20

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.

Net unilateral transfers in the United States have been:

If an American citizen is planning to visit wildlife reserves in Kenya,he will hope that the U.S.dollar appreciates against Kenyan shillings.

Current account transactions are records of the income and expenditures from exports and imports,plus international financial investments and borrowing.

If the dollar per pound exchange rate falls from $1.50 per pound to $1.25 per pound,______.

When net unilateral transfers are added to the net exports of goods and services,the result is called the:

The Bretton Woods system collapsed because:

A drop in the dollar price of British pounds implies that:

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

A nation has an unfavorable balance of trade when:

The current international financial system is a managed float system.

Under the Bretton Woods agreement,the world monetary system operated exactly like the gold standard of pre-World War I years.

Which of the following is true concerning unilateral transfers in the U.S.balance of payments?

The reason the current exchange rate system is called a "managed float" is that:

A country's investment earnings from foreign assets minus foreigners' earnings from their assets in the country is called _____.

Speculators profit by taking risks,while the actions of arbitrageurs involve no risk.

The debit side of the current account includes the imports of _____.

If the exchange rate changes from 75 cents per euro to $1 per euro,the euro has:

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

A country's balance of payments summarizes all economic transactions during a given period between the residents of that country and the residents of other countries.

The current account reflects:

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us 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

The Policy Debate: Active or Passive

International Trade

Economic Development

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Exam 18: International Finance

Net unilateral transfers in the United States have been:

If an American citizen is planning to visit wildlife reserves in Kenya,he will hope that the U.S.dollar appreciates against Kenyan shillings.

Current account transactions are records of the income and expenditures from exports and imports,plus international financial investments and borrowing.

If the dollar per pound exchange rate falls from $1.50 per pound to $1.25 per pound,______.

When net unilateral transfers are added to the net exports of goods and services,the result is called the:

The Bretton Woods system collapsed because:

A drop in the dollar price of British pounds implies that:

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

A nation has an unfavorable balance of trade when:

The current international financial system is a managed float system.

Under the Bretton Woods agreement,the world monetary system operated exactly like the gold standard of pre-World War I years.

Which of the following is true concerning unilateral transfers in the U.S.balance of payments?

The reason the current exchange rate system is called a "managed float" is that:

A country's investment earnings from foreign assets minus foreigners' earnings from their assets in the country is called _____.

Speculators profit by taking risks,while the actions of arbitrageurs involve no risk.

The debit side of the current account includes the imports of _____.

If the exchange rate changes from 75 cents per euro to $1 per euro,the euro has:

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

A country's balance of payments summarizes all economic transactions during a given period between the residents of that country and the residents of other countries.

The current account reflects:

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us 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

The Policy Debate: Active or Passive

International Trade

Economic Development

Filters