The balance of payments is calculated as the sum of the:

current account and the capital account

According to the theory of comparative advantage, a country

exports the goods in which it has a comparative advantage

A country's balance of payments accounts are a summary of ______.

the country's transactions with other countries

If the dollar appreciates relative to the yen, then:

U.S. goods sold in Japan would become more expensive.

Which of the following increases the price of the dollar relative to the Mexican peso?

An increase in the demand for dollars

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International Finance

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unit seven review

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Questions 15

Answers

1
What does NOT affect the exchange rate
trade agreements
state of war or peace
Economies
country's language
2
The funds from savings that are available for investment spending is called _____
surplus of funds
financial capital
investment savings
extra cash
3
The balance of payments is calculated as the sum of the:
trade account and the reserve account
current account and the trade account
current account and the capital account
trade account and the capital account
4
According to the theory of comparative advantage, a country
imports goods in which it has an absolute advantage
exports the goods in which it has a comparative advantage
imports the goods in which it has a comparative advantage
exports goods in which it has an absolute advantage
5
A country's balance of payments accounts are a summary of ______.
the country's transactions with other countries
the country's imports
the country's exports
the country's aggregate supply
6
The rate of increase in prices in a country is known as
economic rate
exchange rate
Inflation rate
intrest rate
7
What's a basic rule of balance of payments?
must sum to zero
Liabilities on left, Assets on right
use a T table
use a C account
8
Exchange rates that are determined by the unregulated forces of supply and demand are:
trade exchange rates.
floating exchange rates.
fixed exchange rates.
managed exchange rates.
9
What is the difference between a country's exports and imports of goods?
trade balance
transaction summary
fiscal policy
monetary policy
10
When one currency increases in value relative to another,
floated.
depreciated.
appreciated.
expanded.
11
The price of one country's currency in terms of another country's currency is the
exchange rate.
balance of payments.
currency appreciation.
balance of trade.
12
If the dollar appreciates relative to the yen, then:
U.S. goods sold in Japan would become more expensive.
U.S. goods sold in Japan would become cheaper.
Japanese goods sold domestically would become more expensive
U.S. goods sold domestically would become cheaper.
13
The exchange rate never changes
False
True
14
What are the relative values of different national currencies?
comparative currencies
exchange rates
trade rates
capital flows
15
Which of the following increases the price of the dollar relative to the Mexican peso?
An decrease in Mexican demand for American imports
An increase in the supply of dollars
A decrease in the supply of pesos
An increase in the demand for dollars

International Finance Flashcards | StudBud