Exam 2: International Flow of Funds

A high home inflation rate relative to other countries would ____ the home country's current account balance, other things being equal. High growth in the home income level relative to other countries would ____ the home country's current account balance, other things being equal.

In recent years, the United States has had a relatively (compared to other countries) ____ balance of trade ____ with China.

The primary component of the capital account is the balance of trade.

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

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.

The sale of patent rights by a U.S. firm to a Russian firm reflects a credit to the U.S. balance of payments account.

Which of the following would likely have the least direct influence on a country's current account?

Which of the following is not a goal of the International Monetary Fund (IMF)?

Without international capital flows, there would be ____ funding available in the United States across all risk levels, and the cost of funding would be ____ regardless of the firm's risk level.

Which of the following is not a result of the North American Free Trade Agreement (NAFTA)?

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

The World Bank's Multilateral Investment Guarantee Agency (MIGA):

Which of the following is not likely to represent a strategy by the government of Country X to reduce its balance-of-trade deficit with Country Y?

According to the text, international trade (exports plus imports combined) as a percentage of GDP is:

Which of the following statements is not true?

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

An increase in the use of quotas is expected to:

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).

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.

Japan's annual interest rate has been relatively ____ compared to other countries for several years, because the supply of funds in its credit market has been very ____.