Question : 21) An Italian citizen buys a U.S. bond. transaction will : 1381284

 

21) An Italian citizen buys a U.S. bond. This transaction will be entered as

A) a credit in the U.S. current account.

B) a credit in the U.S. capital account.

C) a debit in the U.S. current account.

D) a debit in the U.S. capital account.

 

22) A U.S. individual buys shares in a Swiss company. This transaction will be entered as

A) a credit in the U.S. current account.

B) a debit in the U.S. current account.

C) a credit in the U.S. capital account.

D) a debit in the U.S. capital account.

 

23) A U.S. firm builds a factory in South Africa. This will be entered as a

A) debit in the U.S. capital account.

B) debit in the U.S. current account.

C) credit in the U.S. capital account.

D) credit in the U.S. current account.

24) When an American buys an asset abroad, the transaction

A) is registered as a credit in the capital account, and it decreases private U.S. assets abroad.

B) is registered as a debit in the current account, and it decreases private U.S. assets abroad.

C) is registered as a credit in the capital account, and it increases private U.S. assets abroad.

D) is registered as a debit in the capital account, and it increases private U.S. assets abroad.

 

25) When a foreigner buys shares in a U.S. company, the transaction

A) is registered as a credit in the capital account, and it decreases foreign private assets in the United States.

B) is registered as a debit in the current account, and it decreases private U.S. assets abroad.

C) is registered as a credit in the capital account, and it increases foreign private assets in the United States.

D) is registered as a debit in the capital account, and it increases private U.S. assets abroad.

 

26) Which of the following statements is TRUE?

A) A country runs a capital account deficit if it imports more than it exports.

B) If the current account is in surplus, the capital account must be in deficit.

C) The overall sum of all the entries in the balance of payments must be positive.

D) A country runs a current account surplus if it sells more of its assets abroad than it buys abroad.

 

27) Which of the following statements is TRUE?

A) An increase in exports causes a balance of payments surplus.

B) A decrease in exports causes a balance of payments deficit.

C) A decreases in imports causes a balance of payments surplus.

D) The balance of payments is always in balance.

28) When foreign assets in the United States decrease,

A) the United States residents are reducing their debt to the rest of the world.

B) the United States residents are increasing their stock of assets.

C) the United States residents are increasing their debt to the rest of the world.

D) foreign residents debts to the United States residents also increase.

 

29) When foreign assets in the United States increase,

A) the United States residents are reducing their debt to the rest of the world.

B) the United States residents are increasing their debt to the rest of the world.

C) foreign residents debt to the United States residents also decrease.

D) the United States residents are reducing their stock of assets.

 

30) When United States residents acquire assets abroad, they are in essence

A) borrowing money, and foreign debts to the United States decrease.

B) borrowing money, and foreign debts to the United States increase.

C) lending money, and foreign debts to the United States decrease.

D) lending money, and foreign debts to the United States increase.

 

31) Until the mid-1970s the United States consistently ran

A) current account deficits and capital account surpluses.

B) current account surpluses and capital account deficits.

C) deficits in both the current account and the capital account.

D) surpluses in both the current account and the capital account.

32) In the United States, which of the following is NOT directly determined by U.S. income?

A) consumption

B) income tax revenue

C) exports

D) imports

 

A) Federal deficits

B) Trade gaps

C) Currency appreciations

D) Currency depreciations

 

 

 

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