11) The purchase of foreign assets by Canadians is, for Canada, considered a capital
A) outflow and is recorded as a debit on the current account.
B) outflow and is recorded as a debit on the capital account.
C) inflow and is recorded as a credit on the current account.
D) inflow and is recorded as a credit on the capital account.
E) inflow and is recorded as a debit on the capital account.
12) The purchase of Canadian assets by foreigners is, for Canada, considered a capital
A) outflow and is recorded as a credit on the current account.
B) outflow and is recorded as a debit on the capital account.
C) outflow and is recorded as a debit on the current account.
D) inflow and is recorded as a credit on the capital account.
E) inflow and is recorded as a credit on the current account.
13) Which of the following would appear as a credit item in the trade account of the Canadian balance of payments?
A) dividends payable to Canadians on Canadian-owned assets located in Cuba
B) sales of Canadian steel to European importers
C) Canadian purchases of American-made vehicles
D) purchases by Japanese firms of shares of Canadian firms in the entertainment industry
E) the opening of an Ottawa branch of a Swiss bank
14) Which of the following would appear as a debit item in the trade account of the Canadian balance of payments?
A) dividends payable to Canadians on Canadian-owned assets located in Australia.
B) sales of Canadian steel to European importers.
C) Canadian purchases of Colombian coffee
D) purchases by a Japanese pension fund of CN Rail shares
E) purchases by General Motors of Canadian-made auto parts
15) Payments by Canadians of interest and dividends on foreign-owned capital located in Canada
A) are a debit in the current account.
B) are a debit in the capital account.
C) contribute to a surplus on the trade account.
D) contribute to increased foreign-exchange holding by the Bank of Canada.
E) are a credit in the capital account.
16) Which one of the following transactions would appear as a debit in the current account of the Canadian balance of payments?
A) The Arabian Capital Investment Corporation makes a loan to a Canadian firm.
B) A Canadian subsidiary exports raw materials to its Dutch parent company.
C) Canadians receive dividends on U.S. investment in Latin America.
D) Canadian tourists in France purchase cases of wine.
E) The Bank of Canada purchases euros to hold in its official reserves.
17) Which one of the following transactions would appear as a credit in the capital account of the Canadian balance of payments?
A) Canadians purchase foreign securities.
B) A Dutch firm purchases a uranium mine in Canada.
C) Canadian firms pay dividends to foreigners.
D) Coffee is imported from Venezuela.
E) French tourists buy ski tickets in Canada.
18) If Canadian exports of goods and services were $40 billion, imports of goods and services were $35 billion, transfers by Canadians to foreigners were $2 billion and transfers from foreigners to Canadian citizens were $1 billion, then the current account balance would be
A) + $6 billion.
B) + $4 billion.
C) – $4 billion.
D) – $6 billion.
E) – $7 billion
19) If Canadian purchases of foreign real estate was $100 million, Canadian purchases of foreign-country bonds was $50 million, foreign purchases of Canadian real estate was $75 million, and foreign purchases of Canadian bonds was $35 million, then the capital account balance is equal to
A) + $90 million.
B) + $40 million.
C) – $10 million.
D) – $40 million.
E) – $90 million.
20) Consider Canada’s balance of payments. If the Canadian government were to purchase more foreign-exchange reserves, this transaction
A) represents the sale of an asset, and thus enters as a credit item in the official financing account.
B) represents the purchase of an asset from abroad, and thus enters as a debit item in the official financing account.
C) enters as a credit in the current account.
D) enters as a credit in the capital account.
E) represents the purchase of an asset from abroad, and thus enters as a debit item in the capital-service account.
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