Copyright Cengage Learning. Powered by Cognero.
Page 41
TOPICS:
Balance-of-Payments Structure
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 5:13 AM
DATE MODIFIED:
7/5/2016 5:14 AM
105. The _____ tabulates the U.S. Balance of Payments
a.
U.S. International Trade Commission
b.
U.S. Department of Labor
c.
Council of Advisors to the Presidents
d.
U.S. Department of Commerce
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
U.S. Balance-of-Payments
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 5:15 AM
DATE MODIFIED:
7/5/2016 5:17 AM
106. Credit items on the U.S. balance of payments statement result in
a.
a deficit on the current account of the United States
b.
a deficit on the capital and financial account of the United States
c.
an inflow of foreign exchange for the United States
d.
an outflow of foreign exchange for the United States
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Balance-of-Payments Structure
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 5:17 AM
DATE MODIFIED:
7/5/2016 5:19 AM
107. If Japanese investors purchase Treasury Bills of the U.S. government, this results in a
a.
b.
c.
d.
ANSWER:
d
Copyright Cengage Learning. Powered by Cognero.
Page 42
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Balance-of-Payments Structure
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 5:19 AM
DATE MODIFIED:
7/5/2016 5:20 AM
108. If U.S. investors purchase Treasury Bills of the British government, this results in a
a.
b.
c.
d.
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Balance-of-Payments Structure
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 5:20 AM
DATE MODIFIED:
7/5/2016 5:22 AM
109. A deficit in the U.S. current account is offset by a surplus
a.
in the U.S. trade account
b.
in the U.S. balance of payments
c.
in the U.S. capital and financial account
d.
in the U.S. official reserve assets
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
What Does A Current Account Deficit (Surplus) Mean?
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 5:22 AM
DATE MODIFIED:
7/5/2016 5:24 AM
Copyright Cengage Learning. Powered by Cognero.
Page 43
110. In recent years, ______ has been the world’s largest international debtor
a.
the United States
b.
China
c.
Japan
d.
the United Kingdom
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
What Does A Current Account Deficit (Surplus) Mean?
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 5:24 AM
DATE MODIFIED:
7/5/2016 5:26 AM
111. A debit in the U.S. current account would be represented by
a.
earnings on U.S. investments abroad flowing into the United States
b.
gifts that Americans make to the poor in Africa
c.
Chinese investors purchasing the securities of the U.S. government
d.
exports of Boeing jetliners to South Korea
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Balance-of-Payments Structure
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 5:26 AM
DATE MODIFIED:
7/5/2016 5:27 AM
112. If General Electric Inc. pays dividends to its Canadian stockholders, this represents a
a.
debit in the U.S. current account
b.
credit in the U.S. current account
c.
debit in the U.S. capital and financial account
d.
credit in the U.S. capital and financial account
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
Copyright Cengage Learning. Powered by Cognero.
Page 44
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
What Does A Current Account Deficit (Surplus) Mean?
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 5:28 AM
DATE MODIFIED:
7/5/2016 5:30 AM
113. If the United States is a net borrower-from or lender-to the rest of the world, this is best indicated by the U.S.
a.
balance of payments position
b.
current account balance
c.
merchandise trade balance
d.
net export balance
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
What Does A Current Account Deficit (Surplus) Mean?
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 5:32 AM
DATE MODIFIED:
7/5/2016 5:34 AM
114. The value of direct investment by Ford Motor Co. in Canada is included in the U.S.
a.
capital and financial account
b.
current account
c.
net export account
d.
merchandise trade account
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Balance-of-Payments Structure
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 5:34 AM
DATE MODIFIED:
7/5/2016 5:36 AM
115. To “balance” the U.S. balance of payments, U.S. Commerce Department statisticians employ
a.
accounting transactions
b.
inflows or outflows of gold reserves
c.
statistical discrepancy
d.
inflows or outflows of government securities
Copyright Cengage Learning. Powered by Cognero.
Page 45
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: The role of money
TOPICS:
U.S. Balance-of-Payments
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 5:36 AM
DATE MODIFIED:
7/5/2016 5:38 AM
116. Concerning the U.S. balance of payments statement, the sum of debits and credits on all transactions will always
a.
be equal
b.
show a deficit
c.
show a surplus
d.
be unequal
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: The role of money
TOPICS:
Balance-of-Payments Structure
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 5:44 AM
DATE MODIFIED:
7/5/2016 5:46 AM
117. When the United States imports goods and services from other countries, the United States
a.
makes payments to other countries
b.
receives payments from other countries
c.
becomes a net lender to other countries
d.
receives interest income from other countries
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
U.S. Balance-of-Payments
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 5:46 AM
DATE MODIFIED:
7/5/2016 5:48 AM
Copyright Cengage Learning. Powered by Cognero.
Page 46
118. The balance of payments statement records
a.
only changes in a country’s official reserve assets that occur over a period of time
b.
only changes in a country’s trade flows that occur over a period of time
c.
only the flow of labor and capital among countries over a period of time
d.
the international trading, lending, and borrowing transactions among countries over a period of time
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
What Does A Current Account Deficit (Surplus) Mean?
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 5:48 AM
DATE MODIFIED:
7/5/2016 5:50 AM
119. Concerning the balance of payments statement, the ______ indicates the receipts from exports of goods and services
sold overseas, the payments for imports of goods and services from overseas, unilateral transfers (net), and income
receipts and payments (net)
a.
capital and financial account
b.
current account
c.
official reserve asset account
d.
monetary gold account
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
U.S. Balance-of-Payments
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 5:51 AM
DATE MODIFIED:
7/5/2016 5:56 AM
120. For the United States, the largest component of its current account transactions consists of
a.
payments for imports of goods and services and receipts from exports of goods and services
b.
payments for military transactions with other countries
c.
travel and transportations payments and receipts with other countries
d.
unilateral transfers to other countries and from other countries
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
Copyright Cengage Learning. Powered by Cognero.
Page 47
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Balance-of-Payments Structure
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 5:57 AM
DATE MODIFIED:
7/5/2016 5:58 AM
121. Mary Smith, a resident of Denver Colorado, purchases a Swiss watch in Chicago. On the U.S. balance of payments
statement, this transaction appears on the
a.
official reserve asset account
b.
net borrowing and lending account
c.
current account
d.
services account
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
U.S. Balance-of-Payments
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 5:59 AM
DATE MODIFIED:
7/5/2016 6:00 AM
122. The current account of the United States would move toward a surplus as a result of
a.
U.S. households importing beer from German breweries
b.
Chinese investors purchasing securities of the U.S. government
c.
German tourists visiting Yellowstone National Park
d.
U.S. construction firms contracting with Japanese architects to design their buildings
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
What Does A Current Account Deficit (Surplus) Mean?
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 6:01 AM
DATE MODIFIED:
7/5/2016 6:02 AM
123. For the U.S. balance of payments statement, which of the following is not recorded in the capital and financial
account?
a.
net interest income from international investments
Copyright Cengage Learning. Powered by Cognero.
Page 48
b.
purchases of Chinese stocks and bonds
c.
sales of Mexican stocks and bonds
d.
the acquiring of a business firm in another country
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Balance-of-Payments Structure
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 6:02 AM
DATE MODIFIED:
7/5/2016 6:04 AM
124. A negative balance in the capital and financial account suggests that a country
a.
is realizing a surplus on its current account
b.
is realizing a deficit on its current account
c.
borrowing from the rest of the world
d.
imports more goods and services than it exports
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
What Does A Current Account Deficit (Surplus) Mean?
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 6:04 AM
DATE MODIFIED:
7/5/2016 6:06 AM
125. A positive balance in the capital and financial account suggests that a country
a.
is realizing a surplus on its current account
b.
is realizing a deficit on its current account
c.
lending to the rest of the world
d.
exports more goods and services than it imports
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
What Does A Current Account Deficit (Surplus) Mean?
Copyright Cengage Learning. Powered by Cognero.
Page 49
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 6:06 AM
DATE MODIFIED:
7/5/2016 6:08 AM
126. A Canadian lumber company purchases a saw mill in the state of Washington. On the U.S. balance of payments
statement, this transaction appears in the
a.
current account
b.
net exports account
c.
net imports account
d.
capital and financial account
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Balance-of-Payments Structure
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 6:08 AM
DATE MODIFIED:
7/5/2016 6:10 AM
127. If the United States has a negative balance on its current account, it
a.
is a net lender to the rest of the world
b.
is a net borrower from the rest of the world
c.
realizes a negative balance on its capital and financial account
d.
runs a surplus in the budget of the federal government
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
What Does A Current Account Deficit (Surplus) Mean?
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 6:10 AM
DATE MODIFIED:
7/5/2016 6:11 AM
128. Concerning the U.S. balance of payments statement, throughout the past 30 years
a.
the current account balance and the capital account balance have moved in the opposite direction
b.
the current account balance and the capital account balance have moved in the same direction
c.
the official reserve assets of the U.S. government have shrunk to zero
d.
the official reserve assets of the U.S. government have increased in infinite amounts
ANSWER:
a
POINTS:
1
Copyright Cengage Learning. Powered by Cognero.
Page 50
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
What Does A Current Account Deficit (Surplus) Mean?
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 6:12 AM
DATE MODIFIED:
7/5/2016 6:14 AM
129. Throughout the past 30 years, the U.S. balance-of-payments statement has indicated
a.
a positive balance on the current account; a positive balance on the capital and financial account
b.
a negative balance on the current account; a negative balance on the capital and financial account
c.
a positive balance on the current account; a negative balance on the capital and financial account
d.
a negative balance on the current account; a positive balance on the capital and financial account
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
What Does A Current Account Deficit (Surplus) Mean?
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 6:14 AM
DATE MODIFIED:
7/5/2016 6:16 AM
130. If Japan lends more to the rest of the world than it borrows from the rest of the world, Japan is a
a.
net borrowing country
b.
net lending country
c.
net exporting country of goods and services
d.
net importing country of goods and services
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
What Does A Current Account Deficit (Surplus) Mean?
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 6:16 AM
DATE MODIFIED:
7/5/2016 6:18 AM
131. In recent years, the United States has been an example of
Copyright Cengage Learning. Powered by Cognero.
Page 51
a.
a net exporter of goods
b.
a net importer of services
c.
a net lending country
d.
a net borrowing country
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
What Does A Current Account Deficit (Surplus) Mean?
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 6:18 AM
DATE MODIFIED:
7/5/2016 6:20 AM
132. If Germany has invested over its history more in other countries than other countries have invested in Germany, then
Germany is a
a.
net creditor nation
b.
net debtor nation
c.
net importer of goods and services
d.
net exporter of stocks and bonds
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Balance of International Indebtedness
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 6:20 AM
DATE MODIFIED:
7/5/2016 6:21 AM
133. Over its history, suppose that France has borrowed more from the rest of the world than it has lent to the rest of the
world. This means that France
a.
has realized continuous surpluses in its current account
b.
has realized continuous surpluses in its goods and services account
c.
is a net debtor nation
d.
is a net creditor nation
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
Copyright Cengage Learning. Powered by Cognero.
Page 52
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Balance of International Indebtedness
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 6:22 AM
DATE MODIFIED:
7/5/2016 6:24 AM
134. If the U.S current account balance is negative
a.
the United States lends to other countries who purchase goods and services from the United States
b.
the United States borrows from other countries to pay for the goods and services that the United States buys
from them
c.
the U.S. balance of international indebtedness shows that the United States is a net creditor nation
d.
the U.S. balance of international indebtedness shows that the United States is a net exporting nation
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
What Does A Current Account Deficit (Surplus) Mean?
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 6:25 AM
DATE MODIFIED:
7/5/2016 6:28 AM
135. The United States realizes several benefits from the dollar serving as the main reserve currency of the world,
including
a.
Americans can buy goods at a marginally cheaper price than households in other nations who must exchange
their currency with each purchase and pay a transaction cost
b.
Americans can borrow at lower interest rates for homes and automobiles
c.
the U.S. government can finance larger deficits longer and at lower interest rates
d.
all of the above
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: The role of money
TOPICS:
The Dollar as the World’s Reserve Currency
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 6:29 AM
DATE MODIFIED:
7/5/2016 6:30 AM
136. In recent years, the two largest holders of U.S. government securities have been
a.
China and Japan
Copyright Cengage Learning. Powered by Cognero.
Page 53
b.
Mexico and Canada
c.
Brazil and Spain
d.
Germany and France
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Balance-of-Payments Structure
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 6:30 AM
DATE MODIFIED:
7/5/2016 7:40 AM
137. Adopting the Special Drawing Right (SDR) as a reserve currency might possibly occur if the United States was to
operate continuous bad economic policy in the form of
a.
deficit spending
b.
high inflation
c.
currency depreciation
d.
all of the above
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: The role of money
TOPICS:
The Dollar as the World’s Reserve Currency
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 6:32 AM
DATE MODIFIED:
7/5/2016 6:34 AM
138. For the United States, a loss in its reserve currency position would likely result in several costs, including
all of the above
a.
Americans would have to pay more for imported goods as the dollar depreciates
b.
interest rates on both private and governmental debt would increase
c.
the economic supremacy of the United States would be lessened
d.
all of the above
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
Copyright Cengage Learning. Powered by Cognero.
Page 54
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Dollar as the World’s Reserve Currency
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 6:35 AM
DATE MODIFIED:
7/5/2016 6:38 AM
139. The ______ is currently the main reserve currency of the global trading and financial system
a.
Euro
b.
U.S. dollar
c.
British pound
d.
Chinese yuan
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: The role of money
TOPICS:
The Dollar as the World’s Reserve Currency
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 6:38 AM
DATE MODIFIED:
7/5/2016 6:40 AM
140. As the world’s main reserve currency, the U.S. dollar is used throughout the world as a
a.
medium of exchange
b.
unit of account
c.
store of value
d.
all of the above
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: The role of money
TOPICS:
The Dollar as the World’s Reserve Currency
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 6:40 AM
DATE MODIFIED:
7/5/2016 7:42 AM
141. About two-thirds of the world’s official foreign exchange reserves are held in
a.
Swiss francs
b.
British pounds
c.
Japanese yen
d.
U.S. dollars
Copyright Cengage Learning. Powered by Cognero.
Page 55
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Dollar as the World’s Reserve Currency
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 6:46 AM
DATE MODIFIED:
7/5/2016 6:48 AM
142. For the U.S. balance of payments statement, the sum of debits and credits on all transactions will always be equal-
that is, the balance of payments always balances.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Balance-of-Payments Structure
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 6:49 AM
DATE MODIFIED:
7/5/2016 7:19 AM
143. For the first time since World War II, the United States became a net international creditor in the mid-1980s and has
remained so ever since.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
What Does A Current Account Deficit (Surplus) Mean?
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 6:50 AM
DATE MODIFIED:
7/5/2016 6:52 AM
144. Because the rest of the world has accepted dollars, the United States has faced virtually no (or minimal) constraint on
its ability to realize current-account deficits.
Copyright Cengage Learning. Powered by Cognero.
Page 56
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Dollar as the World’s Reserve Currency
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 6:52 AM
DATE MODIFIED:
7/5/2016 6:53 AM
145. All countries of the world can simultaneously have balance-of-payments deficits.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Balance-of-Payments Structure
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 6:53 AM
DATE MODIFIED:
7/5/2016 6:55 AM
146. The official reserve assets of the United States consist of special drawing rights (SDRs), foreign currencies, gold, and
drawings at the International Monetary Fund.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Balance-of-Payments Structure
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 6:55 AM
DATE MODIFIED:
7/5/2016 6:57 AM
147. In 2016, the Chinese yuan replaced the U.S. dollar as the main reserve currency of the world.
Copyright Cengage Learning. Powered by Cognero.
Page 57
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: The role of money
TOPICS:
The Dollar as the World’s Reserve Currency
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 6:57 AM
DATE MODIFIED:
7/5/2016 6:58 AM
148. Because the United States dollar is the main reserve currency of the world, the U.S. government must pay higher
interest rates to foreigners who purchase its securities.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: The role of government
TOPICS:
The Dollar as the World’s Reserve Currency
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 6:59 AM
DATE MODIFIED:
7/5/2016 7:00 AM
149. If the U.S. dollar lost its position as the main reserve currency of the world, Americans would have to pay more for
imported goods if the dollar depreciates when foreigners no longer buy dollars as they previously did when the dollar
served as the reserve currency.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: The role of money
TOPICS:
The Dollar as the World’s Reserve Currency
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 7:00 AM
DATE MODIFIED:
7/5/2016 7:02 AM
Copyright Cengage Learning. Powered by Cognero.
Page 58
150. One problem of adopting the Special Drawing Right (SDR) as a reserve currency is that the SDR is backed by
nothing other than the good faith and credit of the International Monetary Fund (IMF); that is, the IMF produces nothing
to support the value of the SDR.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: The role of money
TOPICS:
The Dollar as the World’s Reserve Currency
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 7:02 AM
DATE MODIFIED:
7/5/2016 7:03 AM
151. In recent years, China has proposed an overhaul of the international monetary system in which the Special Drawing
Right (SDR) would eventually replace the dollar as the world’s main reserve currency.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: The role of money
TOPICS:
The Dollar as the World’s Reserve Currency
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 7:04 AM
DATE MODIFIED:
7/5/2016 7:05 AM
152. As the main reserve currency of the world, the Euro serves as a medium of exchange, unit of account, and store of
value.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: The role of money
TOPICS:
The Dollar as the World’s Reserve Currency
Copyright Cengage Learning. Powered by Cognero.
Page 59
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 7:06 AM
DATE MODIFIED:
7/5/2016 7:08 AM
153. About 25 percent of the world’s official foreign exchange reserves are held in U.S. dollars
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: The role of money
TOPICS:
The Dollar as the World’s Reserve Currency
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 7:09 AM
DATE MODIFIED:
7/5/2016 7:11 AM
154. If the Special Drawing Right (SDR) was used as an international currency, the cost of doing business would likely go
up for firms and investors. This is because another step would be added to international transactions, as buyers and sellers
would have to convert their local currencies into SDRs.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The Dollar as the World’s Reserve Currency
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 7:11 AM
DATE MODIFIED:
7/5/2016 7:12 AM
155. In recent years, most economists have argued that the U.S. dollar should be replaced by either the British pound or
the Japanese yen as the world’s main reserve currency.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
Copyright Cengage Learning. Powered by Cognero.
Page 60
STATE STANDARDS:
United States – PA – DISC: The role of money
TOPICS:
The Dollar as the World’s Reserve Currency
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
7/5/2016 7:13 AM
DATE MODIFIED:
7/5/2016 7:14 AM
156. The world economy is currently in approximate balance concerning consumption levels, savings rates, and fiscal
deficits of advanced countries and emerging countries.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
True / False
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Measuring the economy
TOPICS:
Balance of International Indebtedness
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
7/5/2016 7:14 AM
DATE MODIFIED:
7/5/2016 7:17 AM