Question 1

The following table shows the balance of payments statement of Transylvania for 2013.All the figures are in billions of dollars.  Refer to the above data.In 2013, foreigners made a smaller volume of investments in Transylvania than Transylvanians invested abroad.

Accepted Answer

A) True 
 B)False

Question 2

If the price of British pounds, measured in terms of Canadian dollars is rising then, the price of Canadian dollars, measured in terms of British pounds, is also rising.

Accepted Answer

A) True 
 B)False

Question 3

Using Image 18.2 Global Perspective, In October 2017, one Canadian dollar bought:

Accepted Answer

A)  50 U.S.dollars.
B)  0.80 U.S.dollars.
C)  2.60 U.S.dollars.
D)  17.8 U.S.dollars.E) All of the above
F) B) and C)

Question 4

Assume that, under a system of flexible exchange rates, Mexicans decide to increase their investments in Canada.As a result:

Accepted Answer

A)  Canadians will want to buy fewer Mexican goods at the new exchange rate.
B)  the peso and the dollar will both depreciate in value.
C)  the peso and the dollar will both appreciate in value.
D)  the peso will depreciate and the dollar will appreciate in value.E) A) and B)
F) All of the above

Question 5

Under a system of fixed exchange rates, a nation which experiences chronic balance of payments deficits may:

Accepted Answer

A)  initiate protectionist trade policies.
B)  run short of international monetary reserves.
C)  be forced to use contractionary monetary and fiscal policies.
D)  do all of the above.E) A) and C)
F) A) and D)

Question 6

If a nation's balance on current account is a negative $20 billion, while its balance on capital account is a positive $16.5 billion, we can conclude with certainty that this nation is experiencing:

Accepted Answer

A)  a merchandise trade deficit.
B)  a merchandise trade surplus.
C)  a reduction in its stock of foreign currency.
D)  a balance of payments surplus.E) B) and C)
F) A) and B)

Question 7

If the exchange rate changes so that more Swiss francs are required to buy a dollar, then:

Accepted Answer

A)  the Swiss franc has appreciated in value.
B)  Canadians will buy more Swiss goods and services.
C)  more Canadian goods and services will be demanded by the Swiss.
D)  the dollar has depreciated in value.E) None of the above
F) A) and D)

Question 8

The following table shows the trade between Canada and Transylvania for the year 2012.All figures are in billions of dollars.  Refer to the information above.Canada had a merchandise trade:

Accepted Answer

A)  surplus of $137 billion.
B)  surplus of $9 billion.
C)  deficit of $9 billion.
D)  deficit of $128 billionE) All of the above
F) None of the above

Question 9

In saying that the present system of flexible exchange rates is managed we mean that:

Accepted Answer

A)  countries which allow their exchange rate to move freely will lose their borrowing privileges with the IMF.
B)  the value of any IMF member's currency can only vary 2 percent from its par value.
C)  IMF officials determine exchange rates on a day-to-day basis.
D)  the central banks of various countries buy and sell foreign exchange to smooth out short-term fluctuations or undesirable trends in exchange rates.E) All of the above
F) None of the above

Question 10

Suppose the current account balance of an economy is -$50 billion and the capital account balance of the economy is $61 billion.Given the information, it can be said that the balance in the official settlement account is:

Accepted Answer

A)  -$11 billion.
B)  $11 billion.
C)  -$111billion.
D)  $111 billion.E) None of the above
F) A) and D)

Question 11

Using Image 18.2 Global Perspective, In October 2017, one Canadian dollars bought:

Accepted Answer

A)  2 Mexican pesos.
B)  9.23 Mexican pesos.
C)  25 Mexican pesos.
D)  15 Mexican pesos.E) A) and B)
F) All of the above

Question 12

Exports cause:

Accepted Answer

A)  an outflow of money and an inflow of goods and services.
B)  an inflow of money and an inflow of goods and services.
C)  an outflow of money and an outflow of goods and services.
D)  an inflow of money and an outflow of goods and services.E) None of the above
F) C) and D)

Question 13

The following table shows the balance of payments statement of Canada for 2014.All the figures are in billions of dollars.  Refer to the above information.In 2014, Canada's balance of services was:

Accepted Answer

A)  $3 billion.
B)  -$9 billion.
C)  $15 billion.
D)  -$6 billion.E) A) and B)
F) A) and C)

Exam 18: Part A: The Balance of Payments and Exchange Rates

Using Image 18.2 Global Perspective, In October 2017, one Canadian dollars bought:

Correct Answer
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The following table shows the trade between Canada and Transylvania for the year 2012.All figures are in billions of dollars. Refer to the information above.Canada had a merchandise trade:

Correct Answer
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If the price of British pounds, measured in terms of Canadian dollars is rising then, the price of Canadian dollars, measured in terms of British pounds, is also rising.

Correct Answer
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Suppose the current account balance of an economy is -$50 billion and the capital account balance of the economy is $61 billion.Given the information, it can be said that the balance in the official settlement account is:

Correct Answer
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Using Image 18.2 Global Perspective, In October 2017, one Canadian dollar bought:

Correct Answer
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In saying that the present system of flexible exchange rates is managed we mean that:

Correct Answer
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The following table shows the balance of payments statement of Transylvania for 2013.All the figures are in billions of dollars. Refer to the above data.In 2013, foreigners made a smaller volume of investments in Transylvania than Transylvanians invested abroad.

Correct Answer
verified

Under a system of fixed exchange rates, a nation which experiences chronic balance of payments deficits may:

Correct Answer
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The following table shows the balance of payments statement of Canada for 2014.All the figures are in billions of dollars. Refer to the above information.In 2014, Canada's balance of services was:

Correct Answer
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If the exchange rate changes so that more Swiss francs are required to buy a dollar, then:

Correct Answer
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Assume that, under a system of flexible exchange rates, Mexicans decide to increase their investments in Canada.As a result:

Correct Answer
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Exports cause:

Correct Answer
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If a nation's balance on current account is a negative $20 billion, while its balance on capital account is a positive $16.5 billion, we can conclude with certainty that this nation is experiencing:

Correct Answer
verified

Exam 18: Part A: The Balance of Payments and Exchange Rates

Using Image 18.2 Global Perspective, In October 2017, one Canadian dollars bought:

Correct AnswerverifiedShow Answer

The following table shows the trade between Canada and Transylvania for the year 2012.All figures are in billions of dollars. Refer to the information above.Canada had a merchandise trade:

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If the price of British pounds, measured in terms of Canadian dollars is rising then, the price of Canadian dollars, measured in terms of British pounds, is also rising.

Correct AnswerverifiedShow Answer

Suppose the current account balance of an economy is -$50 billion and the capital account balance of the economy is $61 billion.Given the information, it can be said that the balance in the official settlement account is:

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Using Image 18.2 Global Perspective, In October 2017, one Canadian dollar bought:

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In saying that the present system of flexible exchange rates is managed we mean that:

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The following table shows the balance of payments statement of Transylvania for 2013.All the figures are in billions of dollars. Refer to the above data.In 2013, foreigners made a smaller volume of investments in Transylvania than Transylvanians invested abroad.

Correct AnswerverifiedShow Answer

Under a system of fixed exchange rates, a nation which experiences chronic balance of payments deficits may:

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The following table shows the balance of payments statement of Canada for 2014.All the figures are in billions of dollars. Refer to the above information.In 2014, Canada's balance of services was:

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If the exchange rate changes so that more Swiss francs are required to buy a dollar, then:

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Assume that, under a system of flexible exchange rates, Mexicans decide to increase their investments in Canada.As a result:

Correct AnswerverifiedShow Answer

Exports cause:

Correct AnswerverifiedShow Answer

If a nation's balance on current account is a negative $20 billion, while its balance on capital account is a positive $16.5 billion, we can conclude with certainty that this nation is experiencing:

Correct AnswerverifiedShow Answer

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