the United States is able to maintain a large trade deficit because

it is balanced by a large capital surplus

the balance of payments identity shows that the value of

net exports equals the net capital outflow

which of the following will cause the supply of US dollars in the forex market to decrease?

foreign interest rates are low relative to US interest rates

a country that has a trade surplus

sells more goods abroad than it buys from abroad

one of the largest foreign portfolio investments in the united States comes from

chinese purchases of US government debt

foreign direct investment occurs when

a firm runs part of its operation abroad or invests in a foreign company

the balance of trade is the value of

exports minus the value of imports

the Chinese buy a large amount of US government debt because

they have $ left over from sale of goods to US and want dollar denominated

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chapter 18 macroeconomics

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open-market economics.

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Questions 19

Answers

1
in general, the accounting of trade in goods and capital is known as
trade surplus
balance of payments
balance of trade
net capital outflow
2
the United States is able to maintain a large trade deficit because
it is balanced by a large capital surplus
it is balanced by a large capital deficit
it turns into a trade surplus during times of economic expansion
it exports much more than it imports
3
the balance of payments identity shows that the value of
imports equals exports
payments from a country exceeds payments to a country
the net capital inflow equals the net capital outflow
net exports equals the net capital outflow
4
when US dollar appreciates against a foreign currency,US goods become _ expensive for people abroad and US net exports _
less; increase
more; increase
more; decrease
less; decrease
5
alan, a US resident, buys 20 shares of Unibroue stock (based in Canada). Alan's purchase is an example of
foreign export investment
foreign import investment
foreign direct investment
foreign portfolio investment
6
a country with a net capital inflow has
more capital goods flowing into the country than out of it
a trade deficit
a trade surplus
more exports than imports
7
which of the following will cause the supply of US dollars in the forex market to decrease?
foreign interest rates are low relative to US interest rates
US interest rates are low compared to interest rates in other countries
US consumers prefer foreign goods to US goods
investors' confidence in foreign economies increases
8
a country that has a trade surplus
has a negative trade balance
imports more than it exports
buys more goods at home than it buys abroad
sells more goods abroad than it buys from abroad
9
one of the largest foreign portfolio investments in the united States comes from
chinese purchases of US capital goods
US purchases of Chinese consumption goods
chinese purchases of US government debt
US purchases of Chinese government debt
10
the amount of money that people can invest is equal to
the value of consumption after gains from trade have been made
their income
the value of their output
thier savings
11
according to the balance of payments identity, chinas high net exports must be balanced by
low net imports
high net capital inflows
low net capital outflows
high net capital outflows
12
foreign direct investment occurs when
a firm runs part of its operation abroad or invests in a foreign company
a foreign government directly invests ina firm
investors buy foreign financial assets such as stocks, bonds, etc
foreign sources purchase domestic government debt.
13
the balance of trade is the value of
exports minus the value of imports
imports minus the value of exports
goods sold by the US to foreign parties
goods purchased by the US from foreign counties
14
the investment that occurs when a firm runs part of its operation abroad or invests in a foreign company is
export investment
portfolio investment
foreign direct investment
import investment
15
the balance of payments is the accounting of trade
in financial assets
between two countries with similar imports and exports
in goods and capital
in services
16
when Hamad, who lives in France, buys stock in Disney (American) he is contributing to _ for the United states
private savings
capital outflow
domestic investment
capital inflow
17
foreign direct investment can help businesses
increase profit without having to pay taxes on the earnings
improve a country's trade deficit
reduce overall risk relative to financial investments available at home
cut costs of production
18
when a country imports more than it exports, it has a
trade surplus
trade deficit
zero trade balance
current account deficit
19
the Chinese buy a large amount of US government debt because
it was too long for me to type on here
i only get 75 characters and the real answer is crazy long
the longest one is the answer
they have $ left over from sale of goods to US and want dollar denominated

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