Question : 21) In the capital and financial account, the largest category : 1238310

21) In the capital and financial 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 and financial 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 and financial 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 and financial 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 and financial 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 and financial account.

B) positive entry in the capital and financial 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 and financial 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) In a year, if foreigners invest ________ in the United States than the United States invests abroad, the capital and financial account balance is ________.

A) more; positive

B) less; positive

C) more than; negative

D) less; zero

E) more; zero

29) When the U.S. capital and financial 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 and financial account.