Upgrade to remove ads
Only $35.99/year

Macroeconomics Chapter 18 Practice Questions

Terms in this set (19)

Which of the following transactions would be included in Japan's current account?
An American citizen purchases a new Toyota made in Japan.
Which of the following would increase net exports from the United States
The government of Mexico purchases 500 Ford F-150 pickup trucks from the United States.
The balance of payments includes which three accounts
the current account, the financial account, and the capital account
An HMO hires radiology services from India to cut costs. If all else remains equal, this will
decrease net exports
Based on the following information, what is the balance on the current account
Exports of goods and services = $5 billion
Imports of goods and services= $3 billion
Net income on investments = -$2 billion
Net transfers = -$2 billion
Increase in foreign holdings of assets in the United States = $4 billion
Increase in U.S. holdings of assets in foreign countries = -$1 billion
-$2 billion
Based on the following information, what is the balance on the financial account
Exports of goods and services = $5 billion
Imports of goods and services = $3 billion
Net income on investments = -$2 billion
Net transfers = -$2 billion
Increase in foreign holdings of assets in the United States = $4 billion
Increase in U.S. holdings of assets in foreign countries = -$1 billion
$3 billion
An increase in United States net foreign direct investment would occur if
United States citizens have increased their building or purchasing of facilities in foreign countries
When a foreign investor buys a bond issued in the United States
the balance on the financial account increases
If the balance on the current account is $842 billion and the balance on the financial account is -$603 billion, what is the balance on the capital account, assuming no statistical discrepancy?
-$239 billion
You're traveling in Ireland and are thinking about buying a new digital camera. You've decided you'd be willing to pay $125 for a new camera, but cameras in Ireland are all priced in euros. If the exchange rate is 0.85 euros per dollar, what's the highest price in euros you'd be willing to pay for a camera
106.25 euros
If the dollar appreciates against the Mexican peso,
U.S. exports to Mexico become more expensive.
If there is currently a surplus of dollars, which of the following would you expect to see in the foreign exchange market?
The dollar will depreciate.
If the exchange rate changes from $1.45 = 1 euro to $1.37 = 1 euro, then
the euro has depreciated and the dollar has appreciated
When Americans increase their demand for Japanese goods
the supply of dollars will rise, and the demand for yen will rise
The price of domestic goods in terms of foreign goods is referred to as
the real exchange rate.
Sets with similar terms