1-) Which of the following would be included in the U.S. current account? A. pub

ID: 1099011 • Letter: 1

Question

1-) Which of the following would be included in the U.S. current account?

A. public purchases and sales of financial assets

B. trade balance

C. financial account balance

D. private purchases and sales of financial assets

2-) A deficit in the current account means there will be:

A. a surplus in the financial account.

B. a deficit in the financial account.

C. a balanced financial account.

D. either a surplus or a deficit in the financial account.

3-) Financial capital tends to move from:

A. less developed to more developed countries.

B. more developed to less developed countries.

C. slow-growing countries to faster-growing countries.

D. fast-growing countries to slow-growing countries.

4-) If a country's loanable funds market is initially in equilibrium and then there are capital outflows, this will result in a(n):

A. a fall in the equilibrium interest rate, while the equilibrium quantity of loanable funds will increase.

B. a rise in the equilibrium interest rate, while the equilibrium quantity of loanable funds will decrease.

C. a fall in the equilibrium interest rate, while the equilibrium quantity of loanable funds will decrease.

D. a rise in the equilibrium interest rate, while the equilibrium quantity of loanable funds will increase.

5-) If the U.S. dollar appreciates relative to currencies in other countries, then U.S. imports:

A. and exports will both increase.

B. and exports will both decrease.

C. will decrease and exports will increase.

D. will increase and exports will decrease.

6-) Which of the following would NOT be a method by which a country could maintain a fixed exchange rate?

A. purchases or sales of currency in the foreign exchange market

B. changing monetary policy to shift the supply and demand curve for its own currency

C. implementing foreign exchange controls

D. passing a law requiring that the exchange rate remain fixed

1) B

2) A

3) B

4) B

5) D

6) D

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