Question : 21) In the capital account, the largest category of international : 1228098

21) In the capital account, the largest category of international transactions is

A) net interest.

B) foreign investment in the United States.

C) net transfers.

D) exports and imports.

E) statistical discrepancy.

22) When a German company purchases a U.S. company for $20 million, in the balance of payments the value of that transaction is recorded in the

A) purchase account.

B) current account.

C) investment account.

D) capital account.

E) official purchases account.

23) Toyota purchases a truck factory in San Antonio, Texas. This purchase is entered into which of the balance of payment accounts?

A) current account

B) official settlements account

C) trade account

D) capital account

E) foreign account

24) Suppose IBM purchases a factory in Japan. This purchase is entered into which of the balance of payments accounts?

A) current account

B) capital account

C) official settlements account

D) trade account

E) purchases account

25) Suppose Honda purchases a car factory in the United States. This purchase is entered into which of the balance of payments accounts?

A) current account

B) capital account

C) official settlements account

D) trade account

E) business purchases account

26) Microsoft’s purchase of a factory in Mexico is entered into the U.S. balance of payments accounts as a

A) negative entry in the capital account.

B) positive entry in the capital account.

C) negative entry in the current account.

D) positive entry in the current account.

E) negative entry in the settlements account.

27) The capital account balance is equal to

A) foreign investment in the United States minus U.S. investment abroad.

B) exports minus imports.

C) foreign assets owned by the United States minus U.S. assets owned by foreigners.

D) U.S. investment abroad minus foreign investment in the United States.

E) the value of exports of U.S. capital goods minus the value of imports of capital goods into the United States.

28) If the foreign invest in the United States is ________ than the United States invests abroad, the capital account balance is ________.

A) greater than; positive

B) less than; positive

C) greater than; negative

D) less than; zero

E) greater than; zero

29) When the U.S. capital account shows a positive balance, that is an indication of

A) the value of all U.S. exports exceeding the value of all U.S. imports.

B) the United States acquiring more foreign reserves.

C) U.S. industries becoming more competitive.

D) foreigners investing more in the United States than the United States is investing abroad.

E) the value of U.S. exports of capital goods exceeding the value of U.S. imports of capital goods.

30) U.S. official reserves are

A) equal to the value of the government’s oil reserves.

B) the government’s holding of foreign currency.

C) equal to the government’s holding of gold.

D) equal to the value of U.S. government debt in the hands of foreigners.

E) equal to the balance on the capital account.