Question : 21) Consider Canada’s balance of payments. If the Canadian government : 1384541

21) 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 capital-service account.

C) enters as a credit in the current account.

D) enters as a debit in the capital account.

E) enters as a credit in the capital account.

22) If the Government of Canada were to sell some of its foreign-exchange reserves to a foreign government, the transaction would

A) represent the sale of an asset, and thus enter as a credit item in the official financing account.

B) represent the purchase of an asset from abroad, and thus enter as a debit item in the official financing account.

C) enter as a credit in the current account.

D) enter as a debit in the capital account.

E) enters as a credit in the capital-service account.

23) When a grocery importer in Sweden buys Quebec maple syrup, this transaction

A) appears as a debit item on the Canadian current account.

B) appears as a credit item on the Swedish current account.

C) appears as a credit item on the Canadian capital account.

D) appears as a debit item on the Swedish current account.

E) appears as a debit item on the Canadian capital account.

24) The ________ represents the difference between the payments and receipts from international transactions in goods and services (plus net foreign-investment income). The ________ represents the difference between payments and receipts from international transactions in assets.

A) capital outflow; capital inflow

B) trade balance; capital-service account

C) trade balance; official-financing account

D) current account balance; capital account balance

E) merchandise account; investment account

25) Refer to Table 35-1. What is the current account balance for Lalaland in 2010?

A) -$250 billion

B) -$90 billion

C) $0

D) $90 billion

E) $210 billion

26) Refer to Table 35-1. What is the capital account balance for Lalaland in 2010?

A) -$270 billion

B) -$90 billion

C) $0

D) $90 billion

E) $270 billion

27) Refer to Table 35-1. What is the net change in the stock of Lalaland’s investments abroad in 2010?

A) a decrease of $180 billion

B) a decrease of $90 billion

C) an increase of $90 billion

D) an increase of $180 billion

E) insufficient information to determine

28) Refer to Table 35-1. What is the net capital flow between Lalaland and the rest of the world in 2010?

A) a net capital outflow from Lalaland of $90 billion

B) a net capital outflow from Lalaland of 180 billion

C) a net capital inflow into Lalaland of $90 billion

D) a net capital inflow into Lalaland of $180 billion

E) a net capital outflow from Lalaland of $60 billion

29) Consider a country’s balance of payments. An excess of receipts over payments on the current account

A) must equal the net credit balance of the capital account.

B) must equal the net debit balance of the current account.

C) is not possible.

D) must be matched by an excess of payments over receipts on the capital account.

E) must be matched by an excess of receipts over payments on the capital account.

30) Consider a country’s balance of payments. An excess of payments over receipts on the current account

A) must equal the net debit balance of the capital account.

B) must equal the net credit balance of the current account.

C) is not possible.

D) must be matched by an excess of payments over receipts on the capital account.

E) must be matched by an excess of receipts over payments on the capital account.