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4.1.2) Which of the following international transactions would NOT be counted as a balance of payments (BOP) transaction?
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A) An American tourist purchases cheese in Milwaukee, Wisconsin.
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B) The U.S. subsidiary of a British firm pays profits (dividends) back to its parent firm in London.
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C) A Canadian lumber baron purchases a U.S. corporate bond through an investment broker in
Seattle.
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D) All of the above are considered BOP transactions.
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4.1.1) Which of the following is NOT a major subaccount of the Balance of Payments?
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A) the financial account
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B) the accounts payable
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C) the capital account
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D) the current account
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4.1.3) The balance of payments as applied to a course in international finance may be defined as:
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A) the amount still owed by an exporting firm after making an initial down payment.
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B) the amount still owed by governments to the International Monetary Fund.
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C) the measurement of all international economic transactions between the residents of a country and foreign residents.
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D) the amount of a country's merchandise trade deficit or surplus.
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4.1.4) Balance of payment (BOP) data may be important for any of the following reasons:
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A) BOP data helps to forecast a country's market potential, especially in the short run.
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B) The BOP is an important indicator of a country's foreign exchange rate.
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C) Changes in a country's BOP may signal a change in controls over payment of dividends and interest.
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D) all of the choices provided above
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4.1.5) A country experiencing a serious BOP ________ is more likely to ________ exports than otherwise.
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A) surplus; contract
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B) surplus; expand
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C) deficit; expand
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D) none of the above
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4.1.6) Which of the following would NOT be considered a typical BOP transaction?
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A) Toyota U.S.A. is a U.S. distributor of automobiles manufactured in Japan by its parent company.
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B) The U.S. subsidiary of European financial giant, Credit Suisse, pays dividends to its parent in Zurich.
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C) A U.S. tourist purchases gifts at a museum in London.
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D) All are example of BOP transactions.
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4.2.1) Which of the following is NOT a part of the CURRENT ACCOUNT of BOP?
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A) net export/import of goods
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B) balance of trade
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C) net portfolio investment
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D) net export/import of services
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4.2.2) Which of the following is NOT part of the FINANCIAL ACCOUNT of the BOP?
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A) net foreign direct investment
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B) net import/export of services
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C) net portfolio investment
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D) other Financial items
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4.2.3) Which of the following is NOT an item to be considered in BOP calculations?
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A) A foreign resident purchases a U.S. Treasury Bill.
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B) A U.S.-based firm manages the development of an oil field in Kazakhstan.
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C) A consumer buys a VCR made in Korea from a Florida Wal-Mart store.
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D) A U.S. citizen living in Minnesota travels to Winnipeg, Canada, and buys a case of LaBatt's Canadian beer.
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4.2.4) The balance of payments:
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A) determines the eligibility of countries for IMF aid.
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B) adds up the value of all assets and liabilities of a country on a specific date.
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C) records all international transactions for a country over a period of time.
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D) all of the above
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4.2.5) An American tourist purchases a leather jacket while in Italy. Which of the following statements is true?
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A) The leather purchase would be considered an import for the U.S. BOP.
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B) This transaction would be properly accounted for in the Current Account of the U.S. BOP.
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C) The leather purchase is considered an import of a good, and thus, considered part of the balance of trade as well.
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D) All of these statements are true.
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4.3.1) Which of the following is NOT part of the balance of payments account?
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A) the current account
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B) the financial/capital account
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C) the official reserves account
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D) All of the above are BOP accounts.
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4.3.2) The ________ includes all international economic transactions with income or payment flows occurring within the year.
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A) capital account
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B) current account
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C) financial account
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D) IMF account
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4.3.3) If your company were to import and export textiles, the transactions would be recorded in the current account subcategory of:
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A) services trade.
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B) income trade.
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C) goods trade.
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D) current transfers.
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4.3.4) The travel services provided to international travelers by United Airlines would be recorded in the current account subcategory of:
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A) services trade.
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B) income trade.
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C) goods trade.
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D) current transfers.
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4.3.5) 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:
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A) services trade.
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B) income trade.
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C) goods trade.
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D) current transfers.
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4.3.6) The subcategory that typically dominates the current account is:
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4.3.7) In 2010 the United States posted a current account deficit of -$471 billion. The bulk of the negative value came from:
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A) a net transfer deficit.
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B) an income balance deficit.
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C) a goods trade deficit.
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D) an income trade deficit.
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4.3.8) Over the last two decades the surplus on U.S. services trade has typically been ________ the deficit on U.S. goods trade.