Question 1

Which of the following is NOT a part of the Current Account of BOP?

Accepted Answer

A) net export/import of goods 
B) Balance of Trade 
C) net portfolio investment 
D) net export/import of services 
A) net export/import of goods 
B) Balance of Trade 
C) net portfolio investment 
D) net export/import of services

Question 2

Two types of business transactions dominate the balance of payments.Which of the following is NOT such a transaction?

Accepted Answer

A) the exchange of real assets and financial assets 
B) the exchange of real assets and political contributions 
C) the exchange of goods and services and financial transactions such as loans 
D) All of the above are business transactions. 
A) the exchange of real assets and financial assets 
B) the exchange of real assets and political contributions 
C) the exchange of goods and services and financial transactions such as loans 
D) All of the above are business transactions.

Question 3

Which of the following could be considered a typical BOP transaction?

Accepted Answer

A) An American tourists purchases a hotel room in Guanajuato, Mexico. 
B) Mountaineers from Colorado, USA, pay for guides for their assent of Mt. Everest 
C) General Electric Inc. pays for a new manufacturing facility in Chile. 
D) All of the above are BOP transactions. 
A) An American tourists purchases a hotel room in Guanajuato, Mexico. 
B) Mountaineers from Colorado, USA, pay for guides for their assent of Mt. Everest 
C) General Electric Inc. pays for a new manufacturing facility in Chile. 
D) All of the above are BOP transactions.

Question 4

China's "double surplus" in the current account and the financial account is typical for large economies in the modern era.

Accepted Answer

A) True 
 B)False

Question 5

A positive current account balance (surplus)contributes directly to increasing the measure of GDP.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is NOT part of the Financial Account of the BOP?

Accepted Answer

A) net foreign direct investment. 
B) net import/export of services 
C) net portfolio investment 
D) other Financial items 
A) net foreign direct investment. 
B) net import/export of services 
C) net portfolio investment 
D) other Financial items

Question 7

It is possible that the J-curve path for BOT adjustments may be elongated or even inapplicable if exports are NOT predominately priced in the domestic currency and/or imports are NOT predominately priced in the foreign currency.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is NOT part of the balance of payments account?

Accepted Answer

A) the current account 
B) the financial/capital account 
C) the official reserves account 
D) All of the above are BOP accounts. 
A) the current account 
B) the financial/capital account 
C) the official reserves account 
D) All of the above are BOP accounts.

Question 9

In general there is consensus that ________ should be free but there is no such consensus that ________ should be free.

Accepted Answer

A) international investment; international goods trade 
B) international investment; international trade 
C) international trade; international goods trade 
D) international trade; international investment 
A) international investment; international goods trade 
B) international investment; international trade 
C) international trade; international goods trade 
D) international trade; international investment

Question 10

The time from 1971 to today has predominately used a regime of variable exchange rates.It has also seen a decrease in capital mobility.

Accepted Answer

A) True 
 B)False

Question 11

The subcategory that typically dominates the current account is ________.

Accepted Answer

A) goods (merchandise)trade 
B) services trade 
C) income trade 
D) transfer accounts 
A) goods (merchandise)trade 
B) services trade 
C) income trade 
D) transfer accounts

Question 12

Ordinarily countries will demonstrate an inverse relationship between their current and financial accounts.A surplus in one will usually result in a deficit in the other.

Accepted Answer

A) True 
 B)False

Question 13

What is the Official Reserves Account (ORA)and why is it more important for countries under a fixed exchange rate regime than for ones under a floating exchange rate regime?

Accepted Answer

The ORA is the total reserves held by of

Question 14

Balance of payment (BOP)data may be important for any of the following reasons:

Accepted Answer

A) BOP data helps to forecast a country's market potential, especially in the short run. 
B) The BOP is an important indicator of a country's foreign exchange rate. 
C) Changes in a country's BOP may signal a change in controls over payment of dividends and interest. 
D) All of the above. 
A) BOP data helps to forecast a country's market potential, especially in the short run. 
B) The BOP is an important indicator of a country's foreign exchange rate. 
C) Changes in a country's BOP may signal a change in controls over payment of dividends and interest. 
D) All of the above.

Question 15

The ________ is the difference between merchandise imports and exports and a measure of a country's international trade in goods and services.

Accepted Answer

A) balance of payments 
B) current account 
C) capital account 
D) balance of trade 
A) balance of payments 
B) current account 
C) capital account 
D) balance of trade

Question 16

The J-curve adjustment path for trade balance adjustments assumes that ________ products are predominantly priced in the domestic currency and that ________ products are predominantly priced in the foreign currency

Accepted Answer

A) import; import 
B) import; export 
C) export; export 
D) export; import 
A) import; import 
B) import; export 
C) export; export 
D) export; import

Question 17

When categorizing investments for the financial account component of the balance of payments the ________ is an investment where the investor has no control whereas the ________ is an investment where the investor has control over the asset.

Accepted Answer

A) direct investment; portfolio investment 
B) direct investment; indirect investment 
C) portfolio investment; indirect investment 
D) portfolio investment; direct investment 
A) direct investment; portfolio investment 
B) direct investment; indirect investment 
C) portfolio investment; indirect investment 
D) portfolio investment; direct investment

Which of the following is NOT a part of the Current Account of BOP?

Two types of business transactions dominate the balance of payments.Which of the following is NOT such a transaction?

Which of the following could be considered a typical BOP transaction?

China's "double surplus" in the current account and the financial account is typical for large economies in the modern era.

A positive current account balance (surplus)contributes directly to increasing the measure of GDP.

Which of the following is NOT part of the Financial Account of the BOP?

It is possible that the J-curve path for BOT adjustments may be elongated or even inapplicable if exports are NOT predominately priced in the domestic currency and/or imports are NOT predominately priced in the foreign currency.

Which of the following is NOT part of the balance of payments account?

In general there is consensus that should be free but there is no such consensus that should be free.

The time from 1971 to today has predominately used a regime of variable exchange rates.It has also seen a decrease in capital mobility.

The subcategory that typically dominates the current account is ________.

Ordinarily countries will demonstrate an inverse relationship between their current and financial accounts.A surplus in one will usually result in a deficit in the other.

What is the Official Reserves Account (ORA)and why is it more important for countries under a fixed exchange rate regime than for ones under a floating exchange rate regime?

Balance of payment (BOP)data may be important for any of the following reasons:

The ________ is the difference between merchandise imports and exports and a measure of a country's international trade in goods and services.

The J-curve adjustment path for trade balance adjustments assumes that products are predominantly priced in the domestic currency and that products are predominantly priced in the foreign currency

When categorizing investments for the financial account component of the balance of payments the is an investment where the investor has no control whereas the is an investment where the investor has control over the asset.

Current Multinational Challenges and the Global Economy

Financial Goals and Corporate Governance

The International Monetary System

Current Multinational Financial Challenges: the Credit Crisis of 2007 - 2009

The Foreign Exchange Market

International Parity Conditions

Foreign Currency Derivatives and Swaps

Foreign Exchange Rate Determination and Forecasting

Transaction and Translation Exposure

Operating Exposure

The Global Cost and Availability of Capital

Sourcing Equity and Debt Globally

Multinational Tax Management

Foreign Direct Investment and Political Risk

Multinational Capital Budgeting and Cross-Border Acquisitions

International Portfolio Theory and Diversification

Working Capital Management

International Trade Finance

Filters

Exam 4: The Balance of Payments

Which of the following is NOT a part of the Current Account of BOP?

Two types of business transactions dominate the balance of payments.Which of the following is NOT such a transaction?

Which of the following could be considered a typical BOP transaction?

China's "double surplus" in the current account and the financial account is typical for large economies in the modern era.

A positive current account balance (surplus)contributes directly to increasing the measure of GDP.

Which of the following is NOT part of the Financial Account of the BOP?

It is possible that the J-curve path for BOT adjustments may be elongated or even inapplicable if exports are NOT predominately priced in the domestic currency and/or imports are NOT predominately priced in the foreign currency.

Which of the following is NOT part of the balance of payments account?

In general there is consensus that ________ should be free but there is no such consensus that ________ should be free.

The time from 1971 to today has predominately used a regime of variable exchange rates.It has also seen a decrease in capital mobility.

The subcategory that typically dominates the current account is ________.

Ordinarily countries will demonstrate an inverse relationship between their current and financial accounts.A surplus in one will usually result in a deficit in the other.

What is the Official Reserves Account (ORA)and why is it more important for countries under a fixed exchange rate regime than for ones under a floating exchange rate regime?

Balance of payment (BOP)data may be important for any of the following reasons:

The ________ is the difference between merchandise imports and exports and a measure of a country's international trade in goods and services.

The J-curve adjustment path for trade balance adjustments assumes that ________ products are predominantly priced in the domestic currency and that ________ products are predominantly priced in the foreign currency

When categorizing investments for the financial account component of the balance of payments the ________ is an investment where the investor has no control whereas the ________ is an investment where the investor has control over the asset.

Current Multinational Challenges and the Global Economy

Financial Goals and Corporate Governance

The International Monetary System

Current Multinational Financial Challenges: the Credit Crisis of 2007 - 2009

The Foreign Exchange Market

International Parity Conditions

Foreign Currency Derivatives and Swaps

Foreign Exchange Rate Determination and Forecasting

Transaction and Translation Exposure

Operating Exposure

The Global Cost and Availability of Capital

Sourcing Equity and Debt Globally

Multinational Tax Management

Foreign Direct Investment and Political Risk

Multinational Capital Budgeting and Cross-Border Acquisitions

International Portfolio Theory and Diversification

Working Capital Management

International Trade Finance

Filters

In general there is consensus that should be free but there is no such consensus that should be free.

The J-curve adjustment path for trade balance adjustments assumes that products are predominantly priced in the domestic currency and that products are predominantly priced in the foreign currency

When categorizing investments for the financial account component of the balance of payments the is an investment where the investor has no control whereas the is an investment where the investor has control over the asset.