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1) When a country realizes a deficit on its current account: a. It realizes an excess of imports over exports on goods and services b. It becomes a net supplier of funds to other countries c. It becomes a net demander of funds from other countries d. Its net foreign investment position becomes positive

1) When a country realizes a deficit on its current account: a. It realizes an excess of imports over exports on goods and services b. It becomes a net supplier of funds to other countries c. It becomes a net demander of funds from other countries d. Its net foreign investment position becomes positive

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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1) When a country realizes a deficit on its current account: a. It realizes an excess of imports over exports on goods and services b. It becomes a net supplier of funds to other countries c. It becomes a net demander of funds from other countries d. Its net foreign investment position becomes positive 2) When all of the debit or credit items in the balance of payments are combined: a. The total surplus or deficit equals zero b. Services exports equal services imports c. Merchandise imports equal merchandise exports d. Capital imports equal capital exports 3) Which method of trading currencies involves the conversion of one currency into another at one point in time with an agreement to reconvert it back to the original currency at some point in the future? a. Futures transaction b. Spot transaction c. Forward transaction d. Swap transaction 4) Concerning exchange-rate determination, "market fundamentals" include all of the following except: a. Profitability and riskiness of investments b. Speculative opinion about future exchange rates c. Productivity changes affecting production costs d. Monetary policy and fiscal policy 5) The classical economists assumed a. The velocity of money is constant b. The volume of final output is fixed at the full-employment level in the long-run c. The velocity of money depends on physical, structural, and institutional factors d. All of the above
Transcribed Image Text:1) When a country realizes a deficit on its current account: a. It realizes an excess of imports over exports on goods and services b. It becomes a net supplier of funds to other countries c. It becomes a net demander of funds from other countries d. Its net foreign investment position becomes positive 2) When all of the debit or credit items in the balance of payments are combined: a. The total surplus or deficit equals zero b. Services exports equal services imports c. Merchandise imports equal merchandise exports d. Capital imports equal capital exports 3) Which method of trading currencies involves the conversion of one currency into another at one point in time with an agreement to reconvert it back to the original currency at some point in the future? a. Futures transaction b. Spot transaction c. Forward transaction d. Swap transaction 4) Concerning exchange-rate determination, "market fundamentals" include all of the following except: a. Profitability and riskiness of investments b. Speculative opinion about future exchange rates c. Productivity changes affecting production costs d. Monetary policy and fiscal policy 5) The classical economists assumed a. The velocity of money is constant b. The volume of final output is fixed at the full-employment level in the long-run c. The velocity of money depends on physical, structural, and institutional factors d. All of the above
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