An exchange rate is the price of one currency in terms of another.
True
False
status: not answered ()
correct: true
your answer:
2
The U.S. economy is the most dependent on trade in the world.
True
False
status: not answered ()
correct: false
your answer:
3
The capital account consists of foreign direct and indirect investment.
True
False
status: not answered ()
correct: true
your answer:
4
Which of the following may affect international trade flows?
a. inflation
b. national income
c. government restrictions
d. All of the answers are correct.
status: not answered ()
correct: d
your answer:
5
Transactions reflecting inflows of funds generate credits.

9
A country with a merchandise trade surplus necessarily has a current account surplus.
True
False
status: not answered ()
correct: false
your answer:
10
Merchandise trade involves both goods and services.
True
False
status: not answered ()
correct: false
your answer:
11
The balance of payments is a set of accounts showing:
a. tax laws of foreign governments.
b. transactions between domestic and foreign residents.
c. only the dollar value of imports.
d. only U.S. payment for foreign goods.
status: not answered ()
correct: b
your answer:
12
The U.S. has a trade deficit only because politicians have not been able to get favorable
trade deals.
True
False
status: not answered ()
correct: false

c. a joint venture owned 50-50 by U.S. and foreign partners.
d. an acquisition of a Korean firm by a French firm.
status: not answered ()
correct: b
your answer:
17
The balance of payments utilizes double-entry bookkeeping.
True
False
status: not answered ()
correct: true
your answer:
18
Which is true about the balance of payments?
a. It always balances.
b. A given account may have a deficit or surplus.
c. Transactions reflecting inflows of capital are credits.
d. All of the answers are correct.
status: not answered ()
correct: d
your answer:
19
The balance of payments always balances.
True
False
status: not answered ()
correct: true
your answer:
20
Which of the following are examples of foreign direct investment?

d. a and b only.
status: not answered ()
correct: d
your answer:
24
The merchandise trade balance involves:
a. net exports or imports of tangible goods.
b. net exports or imports of goods and services.
c. net exports or imports of goods, services, and factor income.
d. net exports or imports of goods, services, factor income, and transfers.
status: not answered ()
correct: a
your answer:
25
Buying equity in a foreign entity is always foreign direct investment.
True
False
status: not answered ()
correct: false
your answer:
26
The term "exchange rate" refers to:
a. deposits of currency in more than one currency.
b. loans of dollars to foreign entities.
c. the change in interest rates over time.
d. the price of one currency in terms of another.
status: not answered ()
correct: d
your answer:
27

your answer: