Unit 6 Ap Macro Econ

Which account includes both net exports and net unilateral transfers?

(A) The money market account

(B) The trade balance account

(C) The capital and financial account

(D) The foreign investment account

(E) The current account

(E) Current Account

Which of the following transactions in the balance of payments is recorded as a credit entry in a nation’s capital and

financial account?

(A) The sale of common stock to foreign households

(B) Imports of computers used by domestic businesses

(C) The interest earned by the nation on foreign financial assets

(D) The nation’s purchases of consumer goods from foreign firms

(E) The nation’s purchases of accounting services from foreign firms

A) The sale of common stock to foreign households

Which of the following is an example of foreign direct investment?

(A) A United States automobile manufacturer building a steel plant in Russia

(B) A United States citizen purchasing corporate bonds issued by a French manufacturing firm

(C) A Mexican citizen purchasing United States Treasury bills

(D) The Federal Reserve purchasing Japanese yen

(E) Immigrant workers in the United States sending money to their native country

(A) A United States automobile manufacturer building a steel plant in Russia

The price of one nation’s currency expressed in terms of another nation’s currency is called

(A) the world price

(B) the exchange rate

(C) the law of one price

(D) terms of trade

(E) purchasing-power parity

(B) the exchange rate