Question 1

The United States issues a $10,000 debt forgiveness to Argentina.How is this accounted for in the balance of payments?

Accepted Answer

A)  financial account, U.S. asset import 
B)  current account, Argentina transfer payment 
C)  current account, U.S. service export 
D)  financial account, U.S. asset export 
E)  current account, Argentina good import

Question 2

For most macroeconomists

Accepted Answer

A)  national income accounts and national output accounts are equal to each other. 
B)  national income accounts exceed national output accounts. 
C)  national output accounts exceed national income accounts. 
D)  it is impossible to tell whether national income accounts equal to national output accounts. 
E)  national income accounts is much more important than national output accounts.

Question 3

The United States began to report its gross domestic product (GDP)only since

Accepted Answer

A)  1900. 
B)  1921. 
C)  1931. 
D)  1941. 
E)  1991.

Question 4

Discuss the two different methods the Bureau of Economic Analysis (BEA)uses to place current values on foreign direct investments.

Accepted Answer

The answer of Discuss the two different methods the Bureau...

Question 5

Movements in GDP

Accepted Answer

A)  and GNP usually do not differ greatly. 
B)  and GNP usually do not differ greatly, as a practical matter. 
C)  and GNP usually do differ greatly. 
D)  are usually smaller than those of GNP movements, in practice. 
E)  are inversely proportional to movements in GNP.

Question 6

A closed economy

Accepted Answer

A)  can save either by building up its capital stock or by acquiring foreign wealth. 
B)  can save only by building up its capital stock. 
C)  can save only by acquiring foreign wealth. 
D)  cannot save either by building up its capital stock or by acquiring foreign wealth. 
E)  can save by avoiding excessive imports.

Question 7

Fill in the following table.

Accepted Answer

The answer of Fill in the following table.
 ...

Question 8

Government savings,  ,is equal to

Accepted Answer

A)  T - G. 
B)  T + G. 
C)  T = G. 
D)  T + G - I. 
E)  T - G = I.

Question 9

In the United States,(gross)investment has fluctuated between ________ of GNP in recent years.

Accepted Answer

A)  2 and 12 percent 
B)  11 and 22 percent 
C)  22 and 32 percent 
D)  32 and 42 percent 
E)  42 and 52 percent

Question 10

Which one of the following statements is the MOST accurate?

Accepted Answer

A)  GNP plus depreciation is called net national product (NNP). 
B)  GNP less depreciation is called net national product (NNP). 
C)  GNP less depreciation is called net factor product (NFP). 
D)  GDP plus depreciation is called net national product (NNP). 
E)  GDP less depreciation is called net national product (NNP).

Question 11

Purchases of inventories by

Accepted Answer

A)  firms are not counted in investment spending. 
B)  firms are also counted in investment spending. 
C)  households are also counted in investment spending. 
D)  households and Firms are also counted in investment spending. 
E)  foreign consumers are counter in investment spending.

Question 12

Which of the following is TRUE?

Accepted Answer

A)  A country with a current account surplus is earning more from its exports than it spends on imports. 
B)  A country could finance a current account deficit by using previously accumulated foreign wealth to pay for its imports. 
C)  A country with a current account deficit must be increasing its net foreign debts by the amount of the deficit. 
D)  We can describe the current account surplus as the difference between income and absorption. 
E)  All of the above are true of current account balances.

Question 13

The CA is equal to

Accepted Answer

A)  Y - (C - I + G). 
B)  Y + (C + I + G). 
C)  Y - (C + I + G). 
D)  Y - (C + I - G). 
E)  Y + (C - I - G).

Question 14

Government purchases are defined as

Accepted Answer

A)  only goods purchased by federal, state, or local governments. 
B)  all goods and services purchased by the federal government. 
C)  all goods and services purchased by the federal or state government. 
D)  all goods and services purchased by the federal, state, or local government. 
E)  goods and services purchased from the government.

Question 15

A country's current account

Accepted Answer

A)  balance equals the change in its net foreign wealth. 
B)  balance equals the change in its foreign wealth. 
C)  surplus equals the change in its foreign wealth. 
D)  deficit equals the change in its foreign wealth. 
E)  balance equals its GNP.

Question 16

Movements in GDP

Accepted Answer

A)  differ greatly from movements in GNP. 
B)  do not differ greatly from movements in GNP. 
C)  are not allowed to differ at all from movements in GNP by definition. 
D)  need to be inflation adjusted in order to match movements in GNP. 
E)  are not relevant to an examination of national income.

Question 17

The German government carries out an official foreign exchange intervention in which it uses dollars held in an American bank to buy French currency from its citizens.How is this accounted for in the balance of payments?

Accepted Answer

A)  current account, French good export 
B)  current account, German good import 
C)  financial account, French asset export 
D)  financial account, German asset export 
E)  financial account, German asset import

Question 18

Government transfer payments like social security and unemployment benefits are

Accepted Answer

A)  included in government purchases. 
B)  not included in government purchases. 
C)  not included in government purchases, but they are included in the consumption component of GNP. 
D)  not included in government purchases, but they are part of the investment component of GNP. 
E)  included in government purchases but not in the GNP.

Question 19

The official settlements balance or balance of payments is the sum of

Accepted Answer

A)  the current account balance, the capital account balance, the non reserve portion of the financial account balance, the statistical discrepancy. 
B)  the current account balance and the capital account balance. 
C)  the current account balance, the capital account balance, the non reserve portion of the financial account balance. 
D)  the current account balance and the non reserve portion of the financial account balance. 
E)  the current account balance and the interest in all investments.

Exam 2: National Income Accounting and the Balance of Payments

The United States issues a $10,000 debt forgiveness to Argentina.How is this accounted for in the balance of payments?

For most macroeconomists

The United States began to report its gross domestic product (GDP) only since

Discuss the two different methods the Bureau of Economic Analysis (BEA)uses to place current values on foreign direct investments.

Movements in GDP

A closed economy

Fill in the following table.

Government savings, ,is equal to

In the United States,(gross) investment has fluctuated between ________ of GNP in recent years.

Which one of the following statements is the MOST accurate?

Purchases of inventories by

Which of the following is TRUE?

The CA is equal to

Government purchases are defined as

A country's current account

Movements in GDP

The German government carries out an official foreign exchange intervention in which it uses dollars held in an American bank to buy French currency from its citizens.How is this accounted for in the balance of payments?

Government transfer payments like social security and unemployment benefits are

The official settlements balance or balance of payments is the sum of