40) If your company were to import and export textiles, the transactions would b

Question

40) If your company were to import and export textiles, the transactions would be recorded in the current account subcategory of ________. 40) ______ A) goods trade B) services trade C) current transfers D) income trade 41) The travel services provided to international travelers by United Airlines would be recorded in the current account subcategory of ________. 41) ______ A) current transfers B) goods trade C) income trade D) services trade 42) Anaconda Copper Inc. created a subsidiary in Chile last year to mine copper ore. The proportion of net income paid back to the parent company as a dividend would be recorded in the current account subcategory of ________. 42) ______ A) current transfers B) services trade C) goods trade D) income trade 43) The subcategory that typically dominates the current account is ________. 43) ______ A) income trade B) goods (merchandise) trade C) services trade D) transfer accounts 44) In 2007 the United States posted a current account deficit of -$731 billion. The bulk of the negative value came from 44) ______ A) a goods trade deficit. B) an income trade deficit. C) a net transfer deficit. D) an income balance deficit. 45) Over the last two decades the surplus on U.S. services trade has typically been ________ the deficit on U.S. goods trade. 45) ______ A) greater than B) less than C) equal to D) The relationship is constantly shifting from greater than to less than. 46) The BOP must be in balance but the current account need not be. 46) ______ A) True B) False 47) Expenditures by U.S. tourists in foreign countries for foreign goods or services are factored into BOP calculations. 47) ______ A) False B) True 48) Balance of payment (BOP) data may be important for any of the following reasons: 48) ______ A) The BOP is an important indicator of a country's foreign exchange rate. B) Changes in a country's BOP may signal a change in controls over payment of dividends and interest. C) BOP data helps to forecast a country's market potential, especially in the short run. D) all of the above 49) From an effect point of view, a country experiencing a serious BOP ________ is more likely to see exports ________ than otherwise. 49) ______ A) deficit; expand B) surplus; expand C) surplus; contract D) none of the above 50) Which of the following would NOT be considered a typical BOP transaction? 50) ______ A) A U.S. tourist purchases gifts at a museum in London. B) The U.S. subsidiary of European financial giant, Credit Suisse, pays dividends to its parent in Zurich. C) Toyota U.S.A. is a U.S. distributor of automobiles manufactured in Japan by its parent company. D) All are example of BOP transactions. 51) Which of the following is NOT a part of the Current Account of BOP? 51) ______ A) Net export/import of services. B) Net portfolio investment. C) Balance of Trade. D) Net export/import of goods. 52) Which of the following is NOT part of the Financial Account of the BOP? 52) ______ A) Net portfolio investment. B) Net import/export of services. C) Net foreign direct investment. D) Other Financial items. 53) Which of the following is NOT an item to be considered in BOP calculations? 53) ______ A) A consumer buys a VCR made in Korea from a Florida Wal-Mart store. B) A U.S.-based firm manages the development of an oil field in Kazakhstan. C) A U.S. citizen living in Minnesota travels to Winnipeg, Canada and buys a case of LaBatt's Canadian beer. D) Purchase of a U.S. Treasury Bill by a foreign resident. 54) The balance of payments 54) ______ A) records all international transactions for a country over a period of time. B) determines the eligibility of countries for IMF aid. C) adds up the value of all assets and liabilities of a country on a specific date. D) all of the above 55) Regime structures like the gold standard required no cooperative policies among countries, only the assurance that all would abide by the "rules of the game." 55) ______ A) True B) False 57) In the decade since 2000, the U.S. has experienced its largest bilateral trade deficits with the countries of China and Japan. 57) ______ A) True B) False 58) According to the authors, what is the single most important mandate of the European Central Bank? 58) ______ A) Promote price stability within the European Union. B) Promote international trade for countries within the European Union. C) Establish an EMU trade surplus with the United States. D) Price, in euros, all products for sale in the European Union. 59) Which of the following is a way in which the euro affects markets? 59) ______ A) Currency risks and costs related to exchange rate uncertainty are reduced. B) Consumers and business enjoy price transparency and increased price-based competition. C) Countries within the Euro zone enjoy cheaper transaction costs. D) all of the above

Explanation / Answer

40. Goods trade, since we are transacting with goods not services.

41. Service trade, since we are providing services beyond our territory. So it will be consider as service trade.

42. Income trade, Chile is a subsidiary of Anaconda Copper, which means Chile is a part of Anaconda Coper. So, any exchange of goods or service will not be consider as trade because a firm cannot trade with itself.

43. Goods (merchandise) trade, because the majority of the current account is accounted for goods trade.

45. Less than, the United States’ GDP accounted for around 77.6% of service followed by Industry and agriculture.

46. The question is incomplete

47. True, since the U.S tourists are paying outside their territory, it will be factored for BOP, even if they sell to any foreign residents it will be a part of BOP calculations.

48. All of the above, are the key indicators for BOP.

49. Surplus and Expand, when the value of exports exceeds the value of imports is called a trade surplus.

51. Net portfolio investment, it is a part of financial account.

52. Net import/Export of service, is a part of current account.

53. A consumer buys a VCR made in Korea from a Florida Wal-Mart store, consumer buying from a store will not be a part of BOP calculation. But, Wal-Mart store importing Korea’s good will be a part of its calculations.

54. All of the above, are a part of BOP.

58. Promote price stability within the European Union, the integral part of ECB is to prevent financial crisis and sovereign debt crisis inside the Euro-Zone.

59. All of the above, since the Euro-Zone is meant to provide the free movement of goods and services among its group members, without changing any tariff on imports and exports.

Related Questions

Navigate

• Browse (All)
• Browse 4
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.