Question : 31) Consider Canada’s balance of payments. If Canada’s current account : 1384542

31) Consider Canada’s balance of payments. If Canada’s current account is in deficit, then we can be sure that there is a ________ on the capital account, which means a capital ________ to (from) Canada.

A) surplus; inflow

B) deficit; inflow

C) surplus; outflow

D) deficit; outflow

32) A country’s balance of payments is sometimes incorrectly said to be “in deficit.” This statement often refers to a situation where

A) total debits exceed total credits.

B) the official financing account is in surplus.

C) the official financing account is also “in deficit.”

D) the government is increasing its stock of foreign-exchange reserves.

E) debits exceed credits on the capital account only.

33) A country’s balance of payments is sometimes incorrectly said to be “in surplus.” This usually refers to a situation where

A) total credits exceed total debits.

B) the government is increasing its holding of foreign-currency reserves.

C) the official financing account is also in surplus.

D) the official financing accounts show a decrease in the stocks of official reserves.

E) credits exceed debits on the capital account only.

34) Canada’s balance of payments is sometimes incorrectly said to be “in surplus”. The reason this must be incorrect is that

A) Canada’s balance of payments has been in deficit for almost all of its history.

B) unlike most countries, Canada’s balance of payments is almost always balanced.

C) like any other country in the world, Canada’s balance of payments is always perfectly balanced.

D) the Canadian government has long been committed to avoiding balance of payments surpluses.

E) it is not possible for capital flows to be in a surplus situation.

35) Canada’s balance of payments is sometimes incorrectly said to be “in deficit.” The reason this must be incorrect is that

A) Canada’s balance of payments has been in surplus for almost all of its history.

B) unlike most countries, Canada’s balance of payments is almost always balanced.

C) like any other country in the world, Canada’s balance of payments is always perfectly balanced.

D) the Canadian government has long been committed to avoiding balance of payments deficits.

E) it is not possible for capital flows to be in a deficit situation.

36) Consider Canada’s balance of payments. Suppose Canada’s current account has a surplus of $18 billion in 2013. It follows that Canada must have a capital account ________ of ________, meaning that there is a capital flow of this amount ________ Canada.

A) surplus; $18 billion; into

B) deficit; $18 billion; out of

C) deficit; less than $18 billion; out of

D) surplus; less than $18 billion; into

E) deficit; $18 billion; into

37) Consider Canada’s balance of payments. Suppose Canada’s current account has a deficit of $12 billion in 2013. It follows that Canada must have a capital account ________ of ________, meaning that there is a capital flow of this amount ________ Canada.

A) surplus; $12 billion; into

B) deficit; $12 billion; out of

C) deficit; less than $12 billion; out of

D) surplus; less than $12 billion; into

E) deficit; $12 billion; into

38) Consider Canada’s balance of payments. Suppose Canada’s capital account has a deficit of $10 billion in 2013. It follows that Canada must have a current account ________ of ________, meaning that net payments of this amount from the sale of goods and services are flowing ________ Canada.

A) surplus; $10 billion; into

B) deficit; $10 billion; out of

C) deficit; less than $10 billion; out of

D) surplus; $10 billion; out of

E) deficit; $10 billion; into

39) In 2011, Canada had a current account deficit of approximately $49 billion. This deficit implies that during that year, Canada

A) had negative net assets with the rest of the world.

B) also had a capital account deficit.

C) had a net debt to the rest of the world of more than $49 billion.

D) experienced a capital inflow of $49 billion.

E) experienced a decrease in GDP of $49 billion.

40) In 2011, Canada had a capital account surplus of nearly $56 billion. This surplus implies that during that year,

1) foreigners purchased net $56 billion of Canadian assets

2) Canada had a current account deficit

3) Canadians purchased $56 billion of foreign assets

A) 1 only

B) 2 only

C) 3 only

D) 1 and 2

E) 2 and 3