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1) Which of the following statements is correct ? a. If the current accounts is in surplus then the capital account must also be in surplus b. If the current account is in deficit then the capital account must also be in deficit c. The overall sum of all the entries in the balance of payments must be positive d. The overall sum of all entries in the balance of payments must be zero
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2) The differences between a country’s merchandise exports and its merchandise imports is the ? a. balance of payments b. capital account c. current account d. balance of trade
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3) _______ is needed to balancell the balance of payments statements? a. credit transactions b. debit transactions c. unilateral transfers d. statistical discrepancy
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4) The balance of trade is a record of ? a. exports and imports of financial assets b. the current account plus capital account c. the net export of goods and services d. the value of merchandise exports minus imports
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5) Historically countries at early stages of rapid economic development have tender to experience ? a. trade deficit and an excess of investment over domestic saving b. trade surplus and an excess of investment over domestic saving c. trade deficits and an excess of domestic savings over investment d. trade surpluses and an excess of domestic saving over investment
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6) When a country has a trade deficit it ? a. purchases more stocks and bonds from the rest of the world than it sells b. purchases more goods from the rest of the world than it sells c. sells more goods to the rest of the world than it purchases d. sells more stocks and bonds to the rest of the world than it purchases
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7) A current account surplus implies that ? a. the country is a net lender to the rest of the world b. the country is running a net capital account surplus c. foreign investment in domestic securities is at very low levels d. All of the above
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8) A nation will a current account deficit will be ? a. lending more money to other nations b. experiencing a surplus in exports of goods an services c. reducing its indebtedness to other nations d. going further into debt with other nations
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9) The difference between a country’s balance of payments and its balance of international indebtedness? a. is equal to official reserve transactions b. occurs because of foreign exchange fluctuations c. reflects statistical discrepancies d. reflects the difference between flow and stock concepts
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10) In the balance of payments travels and tourism are included in the category of ? a. unilateral transfers b. capital account c. merchandise account d. services account
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