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1、International FinanceAssignment Problems (2) Name: Student No.:I. Choose the correct answer for the following questions (only ONE correct answer) (5 credits for each question, total credits 4 x 15 = 60)1. According to the principle of the balanced balance of payments, if a country reduces its foreig
2、n exchange reserves by $20 million and the statistical discrepancy is in the credit entry of $5 million in a given period of time, the country runs _ of its balance of payments during that period of time. A. $15 million deficits B. $25 million deficits C. $20 million deficits D. $5 million deficits2
3、. If a countrys domestic saving is greater than domestic investment, the country probably has _. A. a current account surplus B. a net capital outflow C. a current account deficit D. Both A and B are possible.3. A debit entry in the balance-of-payments account represents a transaction that _.A. a do
4、mestic resident receives a payment from abroadB. a domestic resident makes a payment to a foreign residentC. will improve the current account statusD. will have no affects on the nations foreign exchange reserves4. In terms of balance-of-payments account, which of the following would be recorded as
5、a debit entry in the U.S. BOP?A. exports of merchandiseB. exports of servicesC. purchase of the U.S. Treasury bonds by non-residentsD. an increase of the deposit in a U.S. residents account at a foreign bank5. A balance-of-payments deficit is defined as a situation in which _.A. the value of payment
6、s made to the foreigners exceeds the value of receipts received from the foreigners in a given period of timeB. the government must borrow in order to meet its budget obligationsC.the value of manufactured good exports is less than the value of imported goodsD. a nation earns much in extra assets or
7、 reduced liabilities in its dealings with the rest of the world6. Which of the following would NOT be considered as a typical BOP transaction?A. Toyota USA is a US distributor of automobiles manufactured in Japan by its parent company. B. A U.S. subsidiary of European financial giant, Credit Suisse,
8、 pays dividends to its parent in Zurich. C. A US tourist purchases gifts at a museum in London. D. All are example of BOP transactions.7. The balance of payments is a statistical record which measures the total value of _. A. a countrys foreign exchange reserves in a certain period of time B. a coun
9、trys foreign trades between the residents of a country and its non-residents for a given period of time C. all economic and financial transactions between the residents of a country and its non-residents for a given period of time D. a countrys capital inflows and outflows at a particular date in a
10、given year8. A British pension fund sells some of its holdings of the stocks of U.S. companies in order to buy U.S. corporate bonds. This transaction will affect _. A. the U.S. international investment position B. the British international investment position C. both countries international investme
11、nt position D. None of the above. This is because both countries international investment position unchanged, only the composition of foreign investments in both U.S. and U.K. changes.9. Which of the following transactions is included in Chinas balance-of-payments account? A. A U.S. embassy in Beiji
12、ng pays salaries to its American staffs. B. The World Bank furnishes the Chinese government with a loan. C. A U.S. student pays tuition fees for his 4 year-study in Beijing University. D. The Chinese embassy in Washington buys telecommunication equipments from a Chinese company in Shanghai.10. If th
13、e U.S. runs current account deficits, we can expect that _. A. it may act as a net debtor in the rest of the world B. its domestic saving may less than its domestic investment C. its domestic production is less than its domestic consumption D. all of the above11. The trade deficit means that _. A. r
14、esidents are importing more goods than they are exporting B. residents are borrowing more funds than they are lending C. residents are receiving more payments than they are making D. residents are producing more goods than they are consuming12. Which of the following is an example of an exchange of
15、financial assets? A. the exchange of butter for wheat B. the exchange of information technology C. the exchange of a fixed-rate loan for a floating-rate loan D. the exchange of gold for jewelry13. For most countries, the subcategory that typically dominates the current account is _. A. unilateral transfers B. goods trade C. income trade D. services trade14. When categorizing investments for the financial account component of the balance of payments the _ is an investmen
