Question 1

Firms in Saudi Arabia sell oil to the U.S.Other things the same,these oil sales

Accepted Answer

A) increase Saudi net exports and net capital outflow. 
B) decrease Saudi net exports and net capital outflow. 
C) increase Saudi net exports and decrease Saudi net capital outflow. 
D) decrease Saudi net exports and increase Saudi net capital outflow. 
A) increase Saudi net exports and net capital outflow. 
B) decrease Saudi net exports and net capital outflow. 
C) increase Saudi net exports and decrease Saudi net capital outflow. 
D) decrease Saudi net exports and increase Saudi net capital outflow.

Question 2

From 1980 to 1987

Accepted Answer

A) foreigners were buying more assets from the United States than Americans were buying abroad.The United States was going into debt. 
B) Americans were buying more assets abroad than foreigners were buying from the United States.The United States was going into debt. 
C) foreigners were buying more assets from the United States than Americans were buying abroad.The United States was moving into surplus. 
D) Americans were buying more assets abroad than foreigners were buying from the United States.The United States was moving into surplus. 
A) foreigners were buying more assets from the United States than Americans were buying abroad.The United States was going into debt. 
B) Americans were buying more assets abroad than foreigners were buying from the United States.The United States was going into debt. 
C) foreigners were buying more assets from the United States than Americans were buying abroad.The United States was moving into surplus. 
D) Americans were buying more assets abroad than foreigners were buying from the United States.The United States was moving into surplus.

Question 3

Bob,a Greek citizen,opens a restaurant in Chicago.His expenditures

Accepted Answer

A) increase U.S.net capital outflow and have no affect on Greek net capital outflow. 
B) increase U.S.net capital outflow and increase Greek net capital outflow. 
C) increase U.S.net capital outflow,but decrease Greek net capital outflow. 
D) decrease U.S.net capital outflow,but increase Greek net capital outflow. 
A) increase U.S.net capital outflow and have no affect on Greek net capital outflow. 
B) increase U.S.net capital outflow and increase Greek net capital outflow. 
C) increase U.S.net capital outflow,but decrease Greek net capital outflow. 
D) decrease U.S.net capital outflow,but increase Greek net capital outflow.

Question 4

Jen and Alica are both U.S.citizens.Jen opens a cafe in France.Alicia buys equipment from a company in Canada to use in her factory.Whose action is an example of U.S.foreign direct investment?

Accepted Answer

A) Jen's and Alica's 
B) Jen's but not Alicia's 
C) Alicia's but not Jen's 
D) Neither Anthony's nor Tom's. 
A) Jen's and Alica's 
B) Jen's but not Alicia's 
C) Alicia's but not Jen's 
D) Neither Anthony's nor Tom's.

Question 5

Which of the following is an example of U.S.foreign direct investment and by itself increases U.S.net capital outflow?

Accepted Answer

A) A Swedish bank buys a bond issued by the U.S.government. 
B) A German company builds a car factory in the U.S. 
C) A U.S.mutual fund purchases stock issued by a corporation in Bolivia. 
D) A U.S.grocery chain builds and operates a new warehouse in Honduras. 
A) A Swedish bank buys a bond issued by the U.S.government. 
B) A German company builds a car factory in the U.S. 
C) A U.S.mutual fund purchases stock issued by a corporation in Bolivia. 
D) A U.S.grocery chain builds and operates a new warehouse in Honduras.

Question 6

If a country changes its corporate tax laws so that domestic businesses build and manage more business in other countries,then the net capital outflow of that country

Accepted Answer

A) and the net capital outflow of other countries rise. 
B) rises and the net capital outflow of other countries fall. 
C) falls and the net capital outflow of other countries rise. 
D) None of the above are correct. 
A) and the net capital outflow of other countries rise. 
B) rises and the net capital outflow of other countries fall. 
C) falls and the net capital outflow of other countries rise. 
D) None of the above are correct.

Question 7

If Israel's domestic investment exceeds its national saving,then Israel has

Accepted Answer

A) positive net capital outflows and negative net exports. 
B) positive net capital outflows and positive net exports. 
C) negative net capital outflows and negative net exports. 
D) negative net capital outflows and positive net exports. 
A) positive net capital outflows and negative net exports. 
B) positive net capital outflows and positive net exports. 
C) negative net capital outflows and negative net exports. 
D) negative net capital outflows and positive net exports.

Question 8

When Ghana sells chocolate to the United States,U.S.net exports

Accepted Answer

A) increase,and U.S.net capital outflow increases. 
B) increase,and U.S.net capital outflow decreases. 
C) decrease,and U.S.net capital outflow increases. 
D) decrease,and U.S.net capital outflow decreases. 
A) increase,and U.S.net capital outflow increases. 
B) increase,and U.S.net capital outflow decreases. 
C) decrease,and U.S.net capital outflow increases. 
D) decrease,and U.S.net capital outflow decreases.

Question 9

The value of Austria's exports minus the value of Austria's imports is called

Accepted Answer

A) Austria's net exports. 
B) Austria's net imports. 
C) Austria's foreign portfolio investment 
D) Austria's foreign direct investment. 
A) Austria's net exports. 
B) Austria's net imports. 
C) Austria's foreign portfolio investment 
D) Austria's foreign direct investment.

Question 10

In which period was most of the change in U.S.net capital outflow due to an increase in investment in the U.S.?

Accepted Answer

A) 1980-1987 
B) 1991-2000 
C) 2000-2012 
D) None of the above are correct. 
A) 1980-1987 
B) 1991-2000 
C) 2000-2012 
D) None of the above are correct.

Question 11

Suppose that foreign citizens decide to purchase more U.S.pharmaceuticals and U.S.citizens decide to buy more stock in foreign corporations.Other things the same,these actions

Accepted Answer

A) raise both U.S.net exports and U.S.net capital outflows. 
B) raise U.S.net exports and lower U.S.net capital outflows. 
C) lower both U.S.net exports and U.S.net capital outflows. 
D) lower U.S.net exports and raise U.S.net capital outflows. 
A) raise both U.S.net exports and U.S.net capital outflows. 
B) raise U.S.net exports and lower U.S.net capital outflows. 
C) lower both U.S.net exports and U.S.net capital outflows. 
D) lower U.S.net exports and raise U.S.net capital outflows.

Question 12

Other things the same,which of the following would both make foreigners more willing to engage in U.S.portfolio investment?

Accepted Answer

A) U.S.interest rates rise,the default risk of U.S.assets rise 
B) U.S.interest rates rise,the default risk of U.S.assets fall 
C) U.S.interest rates fall,the default risk of U.S.assets rise 
D) U.S.interest rates fall,the default risk of U.S.assets fall 
A) U.S.interest rates rise,the default risk of U.S.assets rise 
B) U.S.interest rates rise,the default risk of U.S.assets fall 
C) U.S.interest rates fall,the default risk of U.S.assets rise 
D) U.S.interest rates fall,the default risk of U.S.assets fall

Question 13

Net capital outflow measures the imbalance between the amount of

Accepted Answer

A) foreign assets held by domestic residents and domestic assets held by foreign residents. 
B) foreign assets bought by domestic residents and the amount of domestic assets bought by foreigners. 
C) foreign assets bought by domestic residents and the amount of domestic goods and services sold to foreigners. 
D) None of the above is correct. 
A) foreign assets held by domestic residents and domestic assets held by foreign residents. 
B) foreign assets bought by domestic residents and the amount of domestic assets bought by foreigners. 
C) foreign assets bought by domestic residents and the amount of domestic goods and services sold to foreigners. 
D) None of the above is correct.

Question 14

You buy a new car built in Sweden.Other things the same,your purchase by itself

Accepted Answer

A) raises both U.S.exports and U.S.net exports. 
B) raises U.S.exports and lowers U.S.net exports. 
C) raises both U.S.imports and U.S.net exports. 
D) raises U.S.imports and lowers U.S.net exports. 
A) raises both U.S.exports and U.S.net exports. 
B) raises U.S.exports and lowers U.S.net exports. 
C) raises both U.S.imports and U.S.net exports. 
D) raises U.S.imports and lowers U.S.net exports.

Question 15

Eric,a resident of Sweden,purchases a book printed in the U.S.Which country's exports increase?

Accepted Answer

A) Sweden's 
B) the U.S.'s 
C) Sweden's and the U.S.'s 
D) neither Sweden's nor the U.S.'s 
A) Sweden's 
B) the U.S.'s 
C) Sweden's and the U.S.'s 
D) neither Sweden's nor the U.S.'s

Question 16

Which of the following is an example of U.S.foreign portfolio investment?

Accepted Answer

A) Albert,a German citizen,buys stock in a U.S.computer company. 
B) Larry,a citizen of Ireland,opens a fish and chips restaurant in the United States. 
C) Nancy,a U.S.citizen,buys bonds issued by a Japanese bank. 
D) Dustin,a U.S.citizen,opens a country-western tavern in New Zealand. 
A) Albert,a German citizen,buys stock in a U.S.computer company. 
B) Larry,a citizen of Ireland,opens a fish and chips restaurant in the United States. 
C) Nancy,a U.S.citizen,buys bonds issued by a Japanese bank. 
D) Dustin,a U.S.citizen,opens a country-western tavern in New Zealand.

Question 17

If a country had a trade surplus of $50 billion and then its exports rose by $30 billion and its imports rose by $20 billion,its net exports would now be

Accepted Answer

A) $0 billion. 
B) $20 billion. 
C) $40 billion. 
D) $60 billion. 
A) $0 billion. 
B) $20 billion. 
C) $40 billion. 
D) $60 billion.

Question 18

If U.S.consumers increase their demand for apples from New Zealand,then other things the same New Zealand's

Accepted Answer

A) imports and net exports rise. 
B) imports rise and net exports fall. 
C) exports and net exports rise. 
D) exports rise and net exports fall. 
A) imports and net exports rise. 
B) imports rise and net exports fall. 
C) exports and net exports rise. 
D) exports rise and net exports fall.

Question 19

If a country has positive net capital outflows,then its net exports are

Accepted Answer

A) positive,and its saving is larger than its domestic investment. 
B) positive,and its saving is smaller than its domestic investment. 
C) negative,and its saving is larger than its domestic investment. 
D) negative,and its saving is smaller than its domestic investment. 
A) positive,and its saving is larger than its domestic investment. 
B) positive,and its saving is smaller than its domestic investment. 
C) negative,and its saving is larger than its domestic investment. 
D) negative,and its saving is smaller than its domestic investment.

Question 20

A German mutual fund sells euros to a U.S.bank for $20,000.The mutual fund then uses these dollars to purchase a bond issued by United Express,a U.S.delivery company.As a result of these two transactions,what happened to U.S.net capital outflow?

Accepted Answer

A) It fell by $40,000. 
B) It fell by $20,000. 
C) It was unchanged. 
D) It rose by $20,000. 
A) It fell by $40,000. 
B) It fell by $20,000. 
C) It was unchanged. 
D) It rose by $20,000.

Exam 18: Open Economy Macroeconomics Basic Concepts: The International Flows of Goods and Capital

Firms in Saudi Arabia sell oil to the U.S.Other things the same,these oil sales

From 1980 to 1987

Bob,a Greek citizen,opens a restaurant in Chicago.His expenditures

Jen and Alica are both U.S.citizens.Jen opens a cafe in France.Alicia buys equipment from a company in Canada to use in her factory.Whose action is an example of U.S.foreign direct investment?

Which of the following is an example of U.S.foreign direct investment and by itself increases U.S.net capital outflow?

If a country changes its corporate tax laws so that domestic businesses build and manage more business in other countries,then the net capital outflow of that country

If Israel's domestic investment exceeds its national saving,then Israel has

When Ghana sells chocolate to the United States,U.S.net exports

The value of Austria's exports minus the value of Austria's imports is called

In which period was most of the change in U.S.net capital outflow due to an increase in investment in the U.S.?

Suppose that foreign citizens decide to purchase more U.S.pharmaceuticals and U.S.citizens decide to buy more stock in foreign corporations.Other things the same,these actions

Other things the same,which of the following would both make foreigners more willing to engage in U.S.portfolio investment?

Net capital outflow measures the imbalance between the amount of

You buy a new car built in Sweden.Other things the same,your purchase by itself

Eric,a resident of Sweden,purchases a book printed in the U.S.Which country's exports increase?

Which of the following is an example of U.S.foreign portfolio investment?

If a country had a trade surplus of $50 billion and then its exports rose by $30 billion and its imports rose by $20 billion,its net exports would now be

If U.S.consumers increase their demand for apples from New Zealand,then other things the same New Zealand's

If a country has positive net capital outflows,then its net exports are

A German mutual fund sells euros to a U.S.bank for $20,000.The mutual fund then uses these dollars to purchase a bond issued by United Express,a U.S.delivery company.As a result of these two transactions,what happened to U.S.net capital outflow?

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion