Question 1

As a result of the European Union, restrictions on exports between ____ were reduced or eliminated.

Accepted Answer

A)   member countries and the U.S.
B)   member countries
C)   member countries and European non-members
D)   none of the aboveE) A) and B)
F) C) and D)

Question 2

The International Development Association was established to:

Accepted Answer

A)   enhance development solely in Asia through grants.
B)   enhance economic development through non-subsidized loans (at market interest rates) .
C)   enhance economic development through low-interest rate loans (below-market rates) .
D)   enhance economic development of the private sector through investment in stock of corporations.E) A) and D)
F) All of the above

Question 3

In recent years, the U.S. has had a relatively (compared to other countries)  ____ balance of trade ____ with China.

Accepted Answer

A)   small; surplus
B)   large; surplus
C)   small; deficit
D)   large; deficitE) A) and D)
F) A) and C)

Question 4

According to the "J curve effect," a weakening of the U.S. dollar relative to its trading partners' currencies would result in an initial ____ in the current account balance, followed by a subsequent ____ in the current account balance.

Accepted Answer

A)   decrease; increase
B)   increase; decrease
C)   decrease; decrease
D)   increase; increaseE) B) and C)
F) A) and D)

Question 5

Which of the following would increase the current account of Country X? Country Y is Country X's sole trading partner.

Accepted Answer

A)   Inflation increases in countries X and Y by comparable amounts.
B)   Country X's and Country Y's currencies depreciate by the same amount.
C)   Country X imposes tariffs on imports from Country Y, and Country Y retaliates by imposing an identical tax on X's exports.
D)   The central banks of Country X and Country Y reduce the money supply to increase interest rates.
E)   Country X imposes a quota on imports, and Country Y retaliates by imposing an identical quota on X's exports.F) B) and D)
G) A) and B)

Question 6

Which of the following will probably not result in an increase in a country's current account balance (assuming everything else constant) ?

Accepted Answer

A)   A decrease in the country's rate of inflation
B)   A decrease in the country's national income level
C)   An increase in government restrictions in the form of tariffs or quotas
D)   An appreciation of the country's currency
E)   All of the above will result in an increased current account balance.F) A) and B)
G) A) and E)

Question 7

The International Financial Corporation was established to:

Accepted Answer

A)   enhance development solely in Asia through grants.
B)   enhance economic development through non-subsidized loans (at market interest rates) .
C)   enhance economic development through low-interest rate loans (below-market rates) .
D)   enhance economic development of the private sector through investment in stock of corporations.E) All of the above
F) B) and C)

Question 8

Recently, the U.S. experienced an annual balance of trade representing a ____.

Accepted Answer

A)   large surplus (exceeding $100 billion) 
B)   small surplus
C)   level of zero
D)   deficitE) C) and D)
F) B) and D)

Question 9

"Dumping" is used in the text to represent the:

Accepted Answer

A)   exporting of goods that do not meet quality standards.
B)   sales of junk bonds to foreign countries.
C)   removal of foreign subsidiaries by the host government.
D)   exporting of goods at prices below cost.E) All of the above
F) A) and B)

Question 10

The direct foreign investment positions by U.S. firms have generally ____ over time. Restrictions by governments on direct foreign investment have generally ___ over time.

Accepted Answer

A)   increased; increased
B)   increased; decreased
C)   decreased; decreased
D)   decreased; increasedE) A) and B)
F) A) and C)

Question 11

An increase in the use of quotas is expected to:

Accepted Answer

A)   reduce the country's current account balance, if other governments do not retaliate.
B)   increase the country's current account balance, if other governments do not retaliate.
C)   have no impact on the country's current account balance unless other governments retaliate.
D)   increase the volume of a country's trade with other countries.E) A) and B)
F) B) and C)

Question 12

The World Bank's Multilateral Investment Guarantee Agency (MIGA) :

Accepted Answer

A)   offers various forms of export insurance.
B)   offers various forms of import insurance.
C)   offers various forms of exchange rate risk insurance.
D)   provides loans to developing countries.
E)   offers various forms of political risk insurance.F) A) and C)
G) A) and E)

Question 13

The current account represents the investment in fixed assets in foreign countries that can be used to conduct business operations.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements is not true?

Accepted Answer

A)   Exporters commonly complain that they are being mistreated because the currency of their country is too weak.
B)   Outsourcing affects the balance of trade because it means that a service is purchased in another country.
C)   Sometimes, trade policies are used to punish countries for various actions.
D)   Tariffs imposed by the EU have caused some friction between EU countries that commonly import products and other EU countries.
E)   All of the above are true.F) A) and C)
G) A) and E)

Question 15

A General Agreement on Tariffs and Trade (GATT)  accord in 1993 called for:

Accepted Answer

A)   increased trade restrictions outside of North America.
B)   lower trade restrictions around the world.
C)   uniform environmental standards around the world.
D)   uniform worker health laws.E) C) and D)
F) A) and D)

Exam 2: International Flow of Funds

A General Agreement on Tariffs and Trade (GATT) accord in 1993 called for:

Correct Answer
verified

An increase in the use of quotas is expected to:

Correct Answer
verified

According to the "J curve effect," a weakening of the U.S. dollar relative to its trading partners' currencies would result in an initial in the current account balance, followed by a subsequent in the current account balance.

Correct Answer
verified

The International Financial Corporation was established to:

Correct Answer
verified

Recently, the U.S. experienced an annual balance of trade representing a ____.

Correct Answer
verified

Which of the following statements is not true?

Correct Answer
verified

Which of the following would increase the current account of Country X? Country Y is Country X's sole trading partner.

Correct Answer
verified

The World Bank's Multilateral Investment Guarantee Agency (MIGA) :

Correct Answer
verified

The direct foreign investment positions by U.S. firms have generally __ over time. Restrictions by governments on direct foreign investment have generally _ over time.

Correct Answer
verified

As a result of the European Union, restrictions on exports between ____ were reduced or eliminated.

Correct Answer
verified

The International Development Association was established to:

Correct Answer
verified

In recent years, the U.S. has had a relatively (compared to other countries) balance of trade with China.

Correct Answer
verified

"Dumping" is used in the text to represent the:

Correct Answer
verified

The current account represents the investment in fixed assets in foreign countries that can be used to conduct business operations.

Correct Answer
verified

Which of the following will probably not result in an increase in a country's current account balance (assuming everything else constant) ?

Correct Answer
verified

Exam 2: International Flow of Funds

A General Agreement on Tariffs and Trade (GATT) accord in 1993 called for:

Correct AnswerverifiedShow Answer

An increase in the use of quotas is expected to:

Correct AnswerverifiedShow Answer

According to the "J curve effect," a weakening of the U.S. dollar relative to its trading partners' currencies would result in an initial ____ in the current account balance, followed by a subsequent ____ in the current account balance.

Correct AnswerverifiedShow Answer

The International Financial Corporation was established to:

Correct AnswerverifiedShow Answer

Recently, the U.S. experienced an annual balance of trade representing a ____.

Correct AnswerverifiedShow Answer

Which of the following statements is not true?

Correct AnswerverifiedShow Answer

Which of the following would increase the current account of Country X? Country Y is Country X's sole trading partner.

Correct AnswerverifiedShow Answer

The World Bank's Multilateral Investment Guarantee Agency (MIGA) :

Correct AnswerverifiedShow Answer

The direct foreign investment positions by U.S. firms have generally ____ over time. Restrictions by governments on direct foreign investment have generally ___ over time.

Correct AnswerverifiedShow Answer

As a result of the European Union, restrictions on exports between ____ were reduced or eliminated.

Correct AnswerverifiedShow Answer

The International Development Association was established to:

Correct AnswerverifiedShow Answer

In recent years, the U.S. has had a relatively (compared to other countries) ____ balance of trade ____ with China.

Correct AnswerverifiedShow Answer

"Dumping" is used in the text to represent the:

Correct AnswerverifiedShow Answer

The current account represents the investment in fixed assets in foreign countries that can be used to conduct business operations.

Correct AnswerverifiedShow Answer

Which of the following will probably not result in an increase in a country's current account balance (assuming everything else constant) ?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

According to the "J curve effect," a weakening of the U.S. dollar relative to its trading partners' currencies would result in an initial in the current account balance, followed by a subsequent in the current account balance.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The direct foreign investment positions by U.S. firms have generally __ over time. Restrictions by governments on direct foreign investment have generally _ over time.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

In recent years, the U.S. has had a relatively (compared to other countries) balance of trade with China.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified