QUIZ 2 FINA 4500

1020 Surplus

990 Surplus

In the US Balance of Payments accounts, spending by a US software company in India, should be treated as: (1)

debit to service account (1)

In the US Balance of Payments accounts, spending by Japanese tourists in Disneyword, Florida, should be treated as: (1)

credit to service account (1)

In the US Balance of Payments accounts, purchase of autoparts from Mexico by General Motor should be treated as: (1)

Debit to current account (1)

While doing the balance of trade accounting, interest payments made by Wells Fargo to its European bond holders, would be recorded in the US Balance of Payment account as a: (1)

Debit to net investment income amount (1)

In the US Balance of Payments accounts, interest payments received by US investors from their European bond portfolios, would be recorded in the US Balance of Payment account as a: (1)

Credit to net investment income account (1)

Dividend payments made by Bank of America to its stock holders in Germany should be recorded in the US Balance of Payment account as a: (2)

Debit to current account (2)

A dividend payment received by US investors from their portfolios of Japanese stocks should be recorded in the US Balance of Payment account as a: (1)

Credit to current account (1)

In the US BOP account, an investment in Southeast Asia by Budweisser should be treated as : (1)

Debit to capital account (1)

In the US BOP account, an investment in Texas made by Totota Motors should be treated as: (1)

Credit to capital account (1)

In the US Balance of Payments accounts, a purchase of Eurobonds by the US Federal Reserve Bank should be treated as: (1)

credit to official reserve account (1)

In the US Balance of Payments accounts, a purchase of Euros by the US Federal Reserve Bank should be treated as: (1)

debit to official reserve account (1)

In the US Balance of Payments accounts, a sale of gold  by the US Federal Reserve Bank should be treated as: (2)

credit to official reserve account (2)

In the US BOP accounts, an increase in a real estate loan made by US commercial banks to Brazillian banks should be treated as: (2)

debit to capital account (2)

In the US BOP accounts, a decrease in US commercial bank loans to Greece, should be treated as: (2)

Credit to capital account (2)

In the US Balance of Payments account, a sale of euros by the US treasury should be treated: (3)

Credit to official reserve account (3)

In the US Balance of Payments accounts, a purchase of Japanese Yen by the US Federal Reserve Bank should be treated as: (2)

Debit to official reserve account (2)

If US national income rose relative to the national income of other countries (and everything else remained constant), US Trade Deficit will: (1)

Increase (1)

If US national income declined, but that of Japan remained constant, then US imports from Japan will: (1)

Decrease (1)

If the US Dollar appreciated against the Japanese yen, (and everything else remains constant), then US imports from Japan would: (2)

Increase (2)

If the US Dollar appreciated against the Japanese yen, (and everything else remains constant), then US exports to Japan would: (2)

Decrease (2)

If the US Dollar appreciated against the Japanese yen, (and everything else remains constant), then US trade deficit with Japan would: (3)

Increase (3)

If inflation rate in the US is lower than the British inflation rate, then US exports to UK would: (4)

Increase (4)

If inflation rate in the US is lower than the British inflation rate, then US trade deficiet with  UK will: (3)

Decrease (3)

Which one of the factors is most likely to be associated with the large US trade deficit?

Low savings rate in the US

The Japanese currently hold about 15% of the US Treasury securities. If the US trade deficit with Japan is reduced, the most likely impact of this will be to:

Decrease the Japanese share in the US treasury market

An decrease in the US trade deficit (and everything else remains constant), will place _________ pressure on the home currency value, and _________ pressure on the foreign currency value.

Upward ; Downward

If US trade deficit with Mexico decreased (and everything else remains constant), then the the Mexican peso is most likely to _______ against the US dollar

Depreciate

Historically, the US Balance of Trade is dominated by a large:

Negative balance on the merchandise account