Exam 4: The Balance of Payments

Describe how the Capital and Financial Account measure international economic transactions of financial assets.

With a(n)_____ exchange rate,the government of a country officially declares that its currency is convertible into a fixed amount of some other currency.

The income category of the current account is predominantly current income associated with investments that were made in previous periods.

The two types of business transactions that dominate the balance of payments include:

While the supply and demand of a country's currency or trade may be imbalanced,the entire balance of payments must always balance.

In the case of false invoicing,capital is moved through the underinvoicing of _______ or the overinvoicing of ________.

__________ refers to the fact that in many countries,governments would not allow firms to fail,workers to lose jobs,or banks to close.

Which international firm collects balance of payments statistics for more than 160 countries around world?

A U.S.firm has recently built a new textile factory in Malaysia. This falls under which component of the financial account?

Financial settlements associated with the change in ownership of real resources or financial items are associated with which current account subcategory?

A U.S.retailer imports $1 million worth of goods from a Chinese tea company. A negative entry is made in the merchandise-import category of the current account for $1 million. At the same time,a positive entry of $1 million is made in the capital account for the transfer of funds to the Chinese company. This example illustrates what fundamental element of BOP accounting?

Describe how the flow of capital has changed from 1860 through 2000.

The ________ account,which consists of goods trade,services trade,income,and transfers,includes all international economic transactions with income or payment flows occurring within the year.

The United States typically includes all of the following subcategories of its capital account balance EXCEPT:

A U.S.government worker is updating a portion of the U.S.balance of payments that deals with goods such as automobiles and textiles,as well as banking services and consulting services. These are all examples of what types of assets found on the BOP?

_______ trade is the export and import of merchandise.

__________ is the accounting methodology where each transaction gives rise to both a debit and a credit of the same currency amount.

The period of 1860 to 1914,called the Bretton Woods era,saw a great expansion of international trade in goods and services.

The easiest and least costly method for moving capital from one country to another is through transfer of cash into collectibles or precious metals.

____________ refers to how a firm is managed and operated.