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41-81
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Understand
Difficulty: 02 Medium
Learning Objective: 41-01 Explain how currencies of different nations are exchanged when
international transactions take place.
Test Bank: II
T o p ic : International Financial Transactions
168.
French and German farmers wanting to buy equipment from an American manufacturer
based in the U.S. will be
169.
If a financial portfolio manager in the U.S. buys British company stocks in the London
Stock Exchange, this would involve
170.
The purchase of a British Rolls-Royce by a U.S. citizen would result in all of the following
except a(n)
41-82
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A.
supply of payments to England.
B.
sale of dollars and the purchase of British pounds.
C.
increase in imports to the United States.
D. gain of foreign exchange for the United States.
171.
Which of the following statements about the financing of international trade is correct?
172.
The equilibrium exchange rate between two currencies is determined by the supply and
demand in the
41-83
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Test Bank: II
T o p ic : International Financial Transactions
173.
A nation's balance of trade on goods is equal to its exports of goods less its imports of
174.
A nation's current account balance is equal to its exports less its imports of
175.
The current account on a nation's balance of payments statement includes all of the
following except
41-84
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A c c e s s i b i l i t y : Keyboard Navigation
Blooms: Analyze
D i f f i c u l t y : 03 Hard
Learning Objective: 41-02 Analyze the balance sheet the United States uses to account for the
international payments it makes and receives.
Test Bank: II
T o p ic : The Balance of Payments
176.
Which transaction represents a debit in the current account section of the U.S. balance of
payments?
177.
When a Japanese company buys a U.S. software company, this transaction will be a
178.
When a U.S. importer buys 100,000 pairs of pants from a Hong Kong company, this
transaction will represent a
41-85
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A.
credit on the current account of the U.S. balance of payments.
B. debit on the current account of the U.S. balance of payments.
C.
credit on the financial account of the U.S. balance of payments.
D.
debit on the financial account of the U.S. balance of payments.
179.
When a U.S. agribusiness company sells 10,000 units of cow vaccine to a company in
France, this transaction will represent a
180.
Which of the following transactions represents a credit on the financial account of the U.S.
balance of payments?
41-86
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
international payments it makes and receives.
Test Bank: II
T o p ic : The Balance of Payments
181.
When a U.S. company purchases a factory in Singapore, this will be a
182.
Which of the following shows the net difference between how much Americans forgave in
debts owed to them by foreigners compared with how much foreigners forgave debts owed to
them by Americans?
183.
Which one of the following is part of the financial account on the U.S. balance of
payments?
41-87
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D. U.S. purchases of assets abroad
184.
Which of the following is an item in the current account balance of the United States?
185.
Remittances of Mexican workers in the U.S. to their families in Mexico are included in the
U.S. balance of payments as a debit in the section on
186.
Which of the following appears as a positive item on the balance of payments accounts for
the United States?
187.
In the balance of payments statement, a current account surplus will be matched by a
188.
In one year the United States had a current account deficit of $461 billion. The balance on
the capital account was −$8 billion. What was the balance on the financial account?
41-89
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D i f f i c u l t y : 03 Hard
Learning Objective: 41-02 Analyze the balance sheet the United States uses to account for the
international payments it makes and receives.
Test Bank: II
T o p ic : The Balance of Payments
189.
The settling of any net deficit in the combined current, and capital and financial accounts is
done with
190.
Official reserves used to achieve a balance of payments between nations engaging in
international trade are held by
191.
If there is a small surplus in the combined current account plus capital and financial account
for a certain year, then to make the two accounts balance, there will be
41-90
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
B.
a decrease in the exchange rate.
C. an increase in official reserve holdings.
D. a decrease in official reserve holdings.
192.
Which of the following would be an indication that a nation has a balance of payments
deficit?
193.
A trade deficit means a net
41-91
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
T o p ic : The Balance of Payments
194.
A nation's annual balance of payments statement must always balance because
195.
U.S. goods exports
+$390
U.S. goods imports
−498
U.S. service exports
+133
U.S. service imports
−107
Net investment income
+12
Net transfers
−22
Capital account
−5
Foreign purchases of U.S. assets
+156
U.S. purchases of foreign assets
−59
The accompanying table contains hypothetical data for the U.S. balance of payments in a year.
All figures are in billions of dollars. The data indicate that there was a trade
41-92
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
international payments it makes and receives.
Test Bank: II
T o p ic : The Balance of Payments
196.
U.S. goods exports
+$390
U.S. goods imports
−498
U.S. service exports
+133
U.S. service imports
−107
Net investment income
+12
Net transfers
−22
Capital account
−5
Foreign purchases of U.S. assets
+156
U.S. purchases of foreign assets
−59
The accompanying table contains hypothetical data for the U.S. balance of payments in a year.
All figures are in billions of dollars. The balance of trade in goods and services was
197.
U.S. goods exports
+$390
U.S. goods imports
−498
U.S. service exports
+133
U.S. service imports
−107
Net investment income
+12
Net transfers
−22
Capital account
−5
Foreign purchases of U.S. assets
+156
U.S. purchases of foreign assets
−59
The accompanying table contains hypothetical data for the U.S. balance of payments in a year.
All figures are in billions of dollars. The balance on the current account was a
198.
U.S. goods exports
+$390
U.S. goods imports
−498
U.S. service exports
+133
U.S. service imports
−107
Net investment income
+12
Net transfers
−22
Capital account
−5
Foreign purchases of U.S. assets
+156
U.S. purchases of foreign assets
−59
The accompanying table contains hypothetical data for the U.S. balance of payments in a year.
All figures are in billions of dollars. The figure for net transfers indicates that the United States
41-94
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D.
received a net private transfer of $22 billion from the rest of the world.
199.
U.S. goods exports
+$390
U.S. goods imports
−498
U.S. service exports
+133
U.S. service imports
−107
Net investment income
+12
Net transfers
−22
Capital account
−5
Foreign purchases of U.S. assets
+156
U.S. purchases of foreign assets
−59
The accompanying table contains hypothetical data for the U.S. balance of payments in a year.
All figures are in billions of dollars. What does the figure for net investment income indicate?
200.
41-95
U.S. goods exports
+$390
U.S. goods imports
−498
U.S. service exports
+133
U.S. service imports
−107
Net investment income
+12
Net transfers
−22
Capital account
−5
Foreign purchases of U.S. assets
+156
U.S. purchases of foreign assets
−59
The accompanying table contains hypothetical data for the U.S. balance of payments in a year.
All figures are in billions of dollars. The balance on the financial account was a
201.
(1) Goods exports
+$220
(2) Goods imports
−328
(3) Exports of services
+54
(4) Imports of services
−55
(5) Net investment income
+18
(6) Net transfers
−11
(7) Capital account
−1
(8) Foreign purchases of Econland assets
+124
(9) Econland purchases of foreign assets
−21
The table contains balance of payments data for the hypothetical nation of Econland. All figures
are in billions of dollars. Econland's balance of trade in goods and services shows a
202.
(1) Goods exports
+$220
(2) Goods imports
−328
(3) Exports of services
+54
(4) Imports of services
−55
(5) Net investment income
+18
(6) Net transfers
−11
(7) Capital account
−1
(8) Foreign purchases of Econland assets
+124
(9) Econland purchases of foreign assets
−21
The table contains balance of payments data for the hypothetical nation of Econland. All figures
are in billions of dollars. Econland's balance on the current account shows a
41-97
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
T o p ic : The Balance of Payments
203.
(1) Goods exports
+$220
(2) Goods imports
−328
(3) Exports of services
+54
(4) Imports of services
−55
(5) Net investment income
+18
(6) Net transfers
−11
(7) Capital account
−1
(8) Foreign purchases of Econland assets
+124
(9) Econland purchases of foreign assets
−21
The table contains balance of payments data for the hypothetical nation of Econland. All figures
are in billions of dollars. Econland's balance on the capital and financial accounts is a
204.
(1) Goods exports
+$220
(2) Goods imports
−328
(3) Exports of services
+54
(4) Imports of services
−55
(5) Net investment income
+18
(6) Net transfers
−11
(7) Capital account
−1
(8) Foreign purchases of Econland assets
+124
(9) Econland purchases of foreign assets
−21
The table contains data for the U.S. balance of payments in a prior year. All figures are in
billions of dollars. There was a
205.
U.S. goods exports
+$793
U.S. goods imports
−1,573
U.S. exports of service
+280
U.S. imports of services
−222
Net investment income
+5
Net transfers
−81
Capital account
−5
Foreign purchases of assets in the U.S.
+1,198
U.S. purchases of foreign assets
−395
The table contains data for the U.S. balance of payments in a prior year. All figures are in
billions of dollars. The data indicate that Americans
41-99
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D i f f i c u l t y : 03 Hard
Learning Objective: 41-02 Analyze the balance sheet the United States uses to account for the
international payments it makes and receives.
Test Bank: II
T o p ic : The Balance of Payments
206.
Foreign exchange rates refer to the
207.
The two pure types of exchange-rate systems are
208.
To Americans buyers, there is a decrease in the relative prices of Japanese goods when the
41-100
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D.
inflation rate in Japan is higher than the inflation rate in the United States and there are fixed
exchange rates.
209.
If an American can purchase 40,000 British pounds for $90,000, the dollar rate of exchange
for the pound is
210.
If a Japanese importer could buy $1,000 U.S. for 122,000 yen, the rate of exchange for one
dollar would be
