Q1. Which of the following statements is most accurate? A) Running a deficit in the current account balance simply means a country imports more than it exports, but a country can do this only for a short time. B) Capital inflows from foreigners are not bad even if the foreigners buy up domestic real estate, domestic industries and own other productive assets. C) A nation's current account surplus or deficit is a good measure of the health of its economy.
Q2. Current account deficits are: A) the result of a country importing less than it exports. B) an indication that the economy is growing rapidly. C) not an indication of a nation's economic health.
Q3. A current account surplus: A) occurs when a country exports less than it imports. B) is an indication of significant foreign investment in the domestic market. C) is not an indication of a nation's economic health.
Q4. Under a flexible exchange rate system, a nation that offers more attractive investment opportunities than its trading partners will be likely to experience a: A) surplus on current account transactions. B) deficit on current account transactions. C) deficit on its capital account transactions.
Q5. The primary reason why the balance of payments method is difficult to implement in determining exchange rates is that: A) the timeliness of trade flow data tends to affect the current account more dramatically than the capital account and thus gives rise to volatility in the foreign exchange markets. B) data on trade flow elasticity is difficult to obtain and the sensitivity of such trade flows to the movement of exchange rates is not determinable. C) foreign exchange markets affect trade flows and help determine the values of the balance of payments and not the other way around.
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发表于 2009-1-13 14:09
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