Question 1

For the United States,U.S.direct foreign investment abroad is more significant than foreign investment in U.S.securities and currency.

Accepted Answer

A) True 
 B)False

Question 2

An example of odious debt would be debts on the part of a nation that were incurred by a dictator for the well being of his family.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is NOT true about the national income identity given by the equation: $ S+(T-G)=I+C \mathrm{~A} ? $

Accepted Answer

A) If CA is positive,national saving finances the purchase of our goods by foreign users. 
B) If CA is negative,our investment exceeds our national savings. 
C) A negative CA may imply that foreigners have confidence in the U.S.economy. 
D) If CA is negative and large,a country risks foreigners owning a large piece of its assets. 
E) None of the above. 
A) If CA is positive,national saving finances the purchase of our goods by foreign users. 
B) If CA is negative,our investment exceeds our national savings. 
C) A negative CA may imply that foreigners have confidence in the U.S.economy. 
D) If CA is negative and large,a country risks foreigners owning a large piece of its assets. 
E) None of the above.

Question 4

In most of the financial crises of the last decade,there were large and sudden financial outflows as both home and foreign investors tried to avoid the expected crises.

Accepted Answer

A) True 
 B)False

Question 5

Capital controls are most often aimed at slowing or eliminating movements of

Accepted Answer

A) reserve assets. 
B) foreign direct investment. 
C) foreign portfolio investment. 
D) nonreserve government assets. 
E) None of the above. 
A) reserve assets. 
B) foreign direct investment. 
C) foreign portfolio investment. 
D) nonreserve government assets. 
E) None of the above.

Question 6

Technology transfer comes only from nations importing new capital goods in the current account.

Accepted Answer

A) True 
 B)False

Question 7

Briefly describe the factors that contributed to the U.S.Current Account deficits of the 1990s.

Accepted Answer

Rapid U.S.economic growth rais

Question 8

Use the following table to answer the next question(s).All values are net.
Table 9.3
  
-Based on Table 9.3,the capital account balance is equal to

Accepted Answer

A) +25. 
B) -25. 
C) -125. 
D) +125. 
E) -225. 
A) +25. 
B) -25. 
C) -125. 
D) +125. 
E) -225.

Question 9

Capital inflows that take the form of direct investment may be particularly beneficial if they bring new technologies,new management techniques,and new ideas to the host country.

Accepted Answer

A) True 
 B)False

Question 10

Typically,the most important determinant of private investment in an economy is

Accepted Answer

A) the inflow of foreign investment. 
B) the size of the capital account surplus. 
C) the size of the current account deficit. 
D) the outflow of private investment. 
E) the amount of domestic savings. 
A) the inflow of foreign investment. 
B) the size of the capital account surplus. 
C) the size of the current account deficit. 
D) the outflow of private investment. 
E) the amount of domestic savings.

Question 11

Use the following table to answer the next question(s).All values are net.
Table 9.3
  
-Based on Table 9.3,if values in the table are amended to reflect a net increase in U.S.foreign direct investment of 100,then the new balance for the capital account balance becomes

Accepted Answer

A) -75. 
B) -25. 
C) +25. 
D) +75. 
E) +225. 
A) -75. 
B) -25. 
C) +25. 
D) +75. 
E) +225.

Question 12

One of the problems with excessive debt is that

Accepted Answer

A) it worsens the central government's budget position by adding large debt service payments to other budget items. 
B) it reduces the quantity of resources available to invest in economic development. 
C) if debt service is substantial,schools,health clinics,roads,ports,other infrastructure,and social needs are less likely to be addressed. 
D) it can intensify and spread a crisis. 
E) All of the above. 
A) it worsens the central government's budget position by adding large debt service payments to other budget items. 
B) it reduces the quantity of resources available to invest in economic development. 
C) if debt service is substantial,schools,health clinics,roads,ports,other infrastructure,and social needs are less likely to be addressed. 
D) it can intensify and spread a crisis. 
E) All of the above.

Question 13

All of the following are true about foreign direct investment (FDI)and portfolio investment except

Accepted Answer

A) increases in the flow of portfolio investments increase the likelihood of financial crisis. 
B) both portfolio investments and FDI are the same in that they both give their holders a claim on the future output of the foreign economy. 
C) FDI is relatively illiquid compared to portfolio investment. 
D) portfolio investments have been on the decline in recent years (or decades). 
E) FDI investors must be willing to go through many ups and downs in order to benefit from their long-term investments. 
A) increases in the flow of portfolio investments increase the likelihood of financial crisis. 
B) both portfolio investments and FDI are the same in that they both give their holders a claim on the future output of the foreign economy. 
C) FDI is relatively illiquid compared to portfolio investment. 
D) portfolio investments have been on the decline in recent years (or decades). 
E) FDI investors must be willing to go through many ups and downs in order to benefit from their long-term investments.

Question 14

People sometimes worry that American trade with other countries will lead to large U.S.trade deficits and the movement of massive amounts of American capital out of the country.This worry is unfounded because countries cannot

Accepted Answer

A) increase savings at the same time that a trade deficit grows. 
B) spend more than they earn. 
C) invest more than they save. 
D) have both current account and financial account deficits at the same time. 
E) increase their trade with other countries without increasing their savings. 
A) increase savings at the same time that a trade deficit grows. 
B) spend more than they earn. 
C) invest more than they save. 
D) have both current account and financial account deficits at the same time. 
E) increase their trade with other countries without increasing their savings.

For the United States,U.S.direct foreign investment abroad is more significant than foreign investment in U.S.securities and currency.

An example of odious debt would be debts on the part of a nation that were incurred by a dictator for the well being of his family.

Which of the following is NOT true about the national income identity given by the equation: $S+(T-G)=I+C \mathrm{~A} ?$

In most of the financial crises of the last decade,there were large and sudden financial outflows as both home and foreign investors tried to avoid the expected crises.

Capital controls are most often aimed at slowing or eliminating movements of

Technology transfer comes only from nations importing new capital goods in the current account.

Briefly describe the factors that contributed to the U.S.Current Account deficits of the 1990s.

Use the following table to answer the next question(s).All values are net. Table 9.3 -Based on Table 9.3,the capital account balance is equal to

Capital inflows that take the form of direct investment may be particularly beneficial if they bring new technologies,new management techniques,and new ideas to the host country.

Typically,the most important determinant of private investment in an economy is

Use the following table to answer the next question(s).All values are net. Table 9.3 -Based on Table 9.3,if values in the table are amended to reflect a net increase in U.S.foreign direct investment of 100,then the new balance for the capital account balance becomes

One of the problems with excessive debt is that

All of the following are true about foreign direct investment (FDI)and portfolio investment except

People sometimes worry that American trade with other countries will lead to large U.S.trade deficits and the movement of massive amounts of American capital out of the country.This worry is unfounded because countries cannot

The United States in a Global Economy

International Economic Institutions Since World War Ii

Comparative Advantage and the Gains From Trade

Comparative Advantage and Factor Endowments

Beyond Comparative Advantage

The Theory of Tariffs and Quotas

Commercial Policy

International Trade and Labor and Environmental Standards

Exchange Rates and Exchange Rate Systems

An Introduction to Open Economy Macroeconomics

International Financial Crises

The United States in the World Economy

The European Union: Many Markets Into One

Trade and Policy Reform in Latin America

Export-Oriented Growth in East Asia

The Bric Countries in the World Economy

Filters

Exam 9: Trade and the Balance of Payments

For the United States,U.S.direct foreign investment abroad is more significant than foreign investment in U.S.securities and currency.

An example of odious debt would be debts on the part of a nation that were incurred by a dictator for the well being of his family.

Which of the following is NOT true about the national income identity given by the equation: S+(T−G)=I+C A? S+(T-G)=I+C \mathrm{~A} ? S+(T−G)=I+C A?

In most of the financial crises of the last decade,there were large and sudden financial outflows as both home and foreign investors tried to avoid the expected crises.

Capital controls are most often aimed at slowing or eliminating movements of

Technology transfer comes only from nations importing new capital goods in the current account.

Briefly describe the factors that contributed to the U.S.Current Account deficits of the 1990s.

Use the following table to answer the next question(s).All values are net. Table 9.3 -Based on Table 9.3,the capital account balance is equal to

Capital inflows that take the form of direct investment may be particularly beneficial if they bring new technologies,new management techniques,and new ideas to the host country.

Typically,the most important determinant of private investment in an economy is

Use the following table to answer the next question(s).All values are net. Table 9.3 -Based on Table 9.3,if values in the table are amended to reflect a net increase in U.S.foreign direct investment of 100,then the new balance for the capital account balance becomes

One of the problems with excessive debt is that

All of the following are true about foreign direct investment (FDI)and portfolio investment except

People sometimes worry that American trade with other countries will lead to large U.S.trade deficits and the movement of massive amounts of American capital out of the country.This worry is unfounded because countries cannot

The United States in a Global Economy

International Economic Institutions Since World War Ii

Comparative Advantage and the Gains From Trade

Comparative Advantage and Factor Endowments

Beyond Comparative Advantage

The Theory of Tariffs and Quotas

Commercial Policy

International Trade and Labor and Environmental Standards

Exchange Rates and Exchange Rate Systems

An Introduction to Open Economy Macroeconomics

International Financial Crises

The United States in the World Economy

The European Union: Many Markets Into One

Trade and Policy Reform in Latin America

Export-Oriented Growth in East Asia

The Bric Countries in the World Economy

Filters

Which of the following is NOT true about the national income identity given by the equation: $S+(T-G)=I+C \mathrm{~A} ?$