国际金融英文版习题

Chapter1 balance of payments Balance of Payments Accounting 1 Balance of paymentsa)d) Answer: d 2Generally speaking, any transaction that results in a receipt from foreignersa) b) c) d)Answer d 3 Generally speaking, any transaction that results in a payment toforeignerse) f) g) e)Answer a) 4 Suppose the McDonalds Corporation imports 100 tons of Canadianbeef, paying for it by transferring the funds to a New York bank account kept by the Canadian Beef Conglomerate.i)j) k) l) Answer: a5 Since the balance of payments is presented as a system of double-entry bookkeeping,a) b) c) d)Answer c)6 A country ' s international transactions can be grouped into the following three maintypes: a)current account, medium term account, and long term capital accountis defined as the statistical record of a country' s international transactions over a certain period of time presented in the form of a double -entry bookkeeping provides detailed informationconcerning the demand and supply of a country 'currencycan be used to evaluate the performance of a country in international economic competition all of the aboveb) c) Will be recorded as a debit, with a negative sign, in the U.S. balance of payments Will be recorded as a debit, with a positive sign, in the U.S. balance of payments Will be recorded as a credit, with a negative sign, in the U.S. balance of paymentsWill be recorded as a credit, with a positive sign, in the U.S. balance of payments Will be recorded as a debit, with a negative sign, in the U.S. balance of payments Will be recorded as a debit, with a positive sign, in the U.S. balance of payments Will be recorded as a credit, with a negative sign, in the U.S. balance of paymentsWill be recorded as a credit, with a positive sign, in the U.S. balance of payments Payment by McDonalds will be recorded as a debitThe deposit of the funds by the seller will be recorded as a debit Payment by McDonalds will be recorded as a creditThe deposit of the funds by the buyer will be credit Every credit in the account is balanced by a matching debit Every debit in the account is balanced by a matching credit a) and b) are both true None of the abovea) b) c) d) Answer: b 12 Capital account includes a) (i), (ii), and (iii) b) (ii), (iii), and (vii)Answer: b) c) d)ccurrent account, long term capital account, and official reserve account current account, capital account, and official reserve account capital account, official reserve account, trade accountAnswer:Invisible trade refers to:a) b) c) d) c services that avoid tax paymentsunderground economy legal, consulting, and engineering services tourist expenditures, only8 The current account is divided into four finer categories: a)b) c) d) Answer: bMerchandise trade, services, income, and statistical discrepancy.Merchandise trade, services, income, and unilateral transfersMerchandise trade, services, portfolio investment, and unilateral transfers Merchandise trade, services, factor income, and direct investment9 Factor i a) b) c)d) Answer: aincomeConsists largely of interest, dividends, and other income on foreigninvestments. Is a theoretical construct of the factors of production, land, labor, capital, and entrepreneurial ability.Is generally a very minor part of national income accounting, smaller than the statistical discrepancy.None of the aboveUSE THE FOLLOWINGINFORMA TION TO ANSWER THE NEXT TWO 10QUESTIONS Theentries in the current account ” and the “ capital account” , combined together,can be outlined (in alphabetic order) as:(i) - direct investment (ii) - factor income (iii) - merchandise (iv) - official transfer(v)- other capital (vi)- portfolio investment (vii) - private transfer (viii) - services11 Current account includes (i), (ii), and (iii)(ii), (iii), and (vii) (iv), (v), and (vii)(i), (v), and (vi)c) (iv), (v), and (vii)d) (i), (v), and (vi) Answer: d 13 The difference between Foreign Direct Investment and Portfolio Investment is that:a)b) c) d) Answer : a Foreign Direct Investment mostly represents the sale and purchase of foreign financial assets such as stocks whereas Portfolio Investment mostly involves the sales and purchase of foreign bonds. Foreign direct investment is about buying land and building factories, whereas portfolio investment is about buying stocks and bonds.All of the above 14 In the latter half of the 1980s, with a strong yen, Japanese firms a) b) Faced difficulty exporting Could better afford to acquire U.S. assets that had become less expensive interms of yen. Financed a sharp increase in Japanese FDI in the United States All of the above c) d) Answer : d 15 International portfolio investments have boomed in recent years, as a result of a) b) c) d) A depreciating U.S. dollar Increased gasoline and other commodity prices. The general relaxation of capital controls and regulation in many countries None of the above Answer: c Answer: c) 16 The capital account measures a) b) c) The sum of U.S. sales of assets to foreigners and U.S. purchases of foreign assets.The difference between U.S. sales of assets to foreigners and U.S. purchases offoreign assets.The difference between U.S. sales of manufactured goods to foreigners and U.S.purchases of foreign products.None of the above d) Answer: b) page 64 17 When Honda, a Japanese auto maker,built a factory in Ohio,a)b) c) d) It was engaged in foreign direct investment It was engaged in portfolio investment It was engaged in a cross-border acquisitionNone of the above.Answer: a) page 64. 18 The capital account may be divided into three categories: a) Cross-border mergers and acquisitions, portfolio investment, and other Portfolio Investment mostly represents the sale and purchase of foreign financial assets such as stocks and bondsthat do not involve a transfer of control .b) investmentDirect investment, portfolio investment, and Cross-border mergers and acquisitions Direct investment, mergers and acquisitions, and other investment Direct investment, portfolio investment, and other investment c) d) Answer: d) 19 When Nestl e , a Swiss firm, bought the American firm Carnation, it was engaged in foreign direct investment. If Nestl e had only-cboonutrgohlltinagnnounmber of shares of the firm NestI e would have been engaged in portfolio investment NestI e would have been engaged in a croborder acquisition It would depend if they bought the shares from an American or a Canadian None of the above. a) b) c) d) Answer: a) 20 Foreign direct investment (FDI) occurs a) b) c) d) Answer : d when an investor acquires a measure of control of a foreign business when there is an acquisition, by a foreign entity in the U.S., of 10 percent or more of the voting shares of a business with sales and purchases of foreign stocks and bonds that do not involve a transfer of controla andb 21 Statistical discrepancy, which by definition represents errors and omissions a) b)c)Cannot be calculated directly Is calculated by taking into account the balance -of-payments identityProbably has some elements that are honest mistakes, it can laundering and drugs.All of the above 't all be moneyd) Answer: d) 22 The statistical discrepancy in the balance-of-payments accounts a) Arise since recordings of payments and receipts are done at different times, in different places, possibly using different methods. Arise since some transactions (illegal transactions?) occur Represents omitted and misrecorded transactions. All of the above b) c) d) Answer: d) 23 Regarding the statistical discrepancy in the balance -of-payments accounts a) off the books ”b) c) d) Answer: d)There is some evidence that financial transactions may be mainly responsible for the discrepancy.The sum of the balance on the capital account and the statistical discrepancy isvery close to the balance of the current account in magnitude. It tends to be positive one year and negative in others, so it a) and b)'s safe to ignore it27 International reserve assets include a) b) c)d)Answer: foreign exchanges” . These are28 Themost important international reserve asset, comprising 94 percent of the total reserve assets held by IMFmember countries is a) b) c) d) Answer: b29 The vast majority of the foreign -exchange reserves held by central banks are denominated ina) b) 24 When a country must make a net payment to foreigners because of a balance-of-payments deficit, the central bank of the country a) b) Should do nothing Should run down its official reserve assets (e.g. gold, foreign exchanges, and SDRs) Should borrow anew from foreign central banks. b) or c) will work c) d) Answer: d) 25 Continued U.S. trade deficits coupled with foreigners currency holdings away from U.S. dollars a) b) ' desire to diversify their c) d) Answer: d could further diminish the position of the dollar as the dominant reserve currency could affect the value of U.S. dollar (e.g. through the currency diversification decisions of Asian central banks) Could lend steam to the emergence of the euro as a credible reserve currencyAll of the above 26 Currently, international reserve assets are comprised of a) b) c) d) Answer: bgold, platinum, foreign exchanges, and special drawing rights (SDRs) gold, foreign exchanges, special drawing rights (SDRs), and reserve positions in the International Monetary Fund (IMF)gold, diamonds, foreign exchanges, and special drawing rights (SDRs) reserve positions in the International Monetary Fund (IMF), only Special Drawing Rights (SDRs) at the IMFreserve positions in the International Monetary Fund (IMF) Foreign currency held by a country ' s central bank None of the above GoldForeign exchangesSpecial Drawing Rights (SDRs)Reserve positions in the International Monetary Fund (IMF) Local currencies U.S. dollarsc) d) Answer: bYen EuroIs a capital account surplus Is a current account deficitIs both a capital account surplus and a current account deficit None of the above 31 Over the last several years the U.S. has run persistent a)b)c)d) Answer: 32 More important than he absolute size of a country disequilibrium a)b) c) d) Answer: The Relationship between Balance of Payments and National Income Accounting For questions in this section, the notation isY = GNP = national income C = consumption I = private investment G = government spending X = exportsM = imports33 National income, or Gross National Product is given by: GNP = Y = C + I + G + X + MGNP = Y = C + I + G + X GNP = I = C + Y + G + XAnswer: b) 34 Which of the following is a true statement? BCA 三 BKA 三BKA - BKA 三Answera)35 There is an intimate relationship between a country' s BCA and how the countryfinances its domestic investment and pays for government expenditures. Thisrelationship is given by BCA= X - M = (S - I) + (T - G). Given this, which of the30 The U.S. Trade Deficita) b) c) d) Answer:Balance-of-payments deficits Balance-of-payments surpluses Current Account deficits CapitalAccount deficits c-of -pay 'msenbtaslance is the nature and cause of the disequilibrium is whether it is a trade surplus or deficitis whether the local government is mercantilist or notNothing is more important than he absolute size of a countrybalance-of-payments disequilibriuma) b) c) d) GNP = Y = C + I + X + M X - M X - M BCA 三 X - MX - M a) b) c) d)true statement? If (S - I) < 0, it implies that a country financedomestic investment.following is a a) 's domestic savings is insufficient tob) If (T - G) < 0, it implies that a countrygovernment spendingboth a) and b) are true none of the above c) d) Answer c) 36 There is an intimate relationship between a country 's tax revenue is insufficient to finance's BCA and how the country finances its domestic investment and pays for government expenditures. This relationship is given by BCA = X - M = (S - I) + (T - G). Given this, which of the following is a true statement? a) b) If (S - I) < 0, it implies that a country finance domestic investment. If (T - G) < 0, it implies that a countrygovernment spending 's domestic savings is insufficient to 's tax revenue is insufficient to finance c) when BCA is negative, it implies that government budget deficits an/or part of domestic investment are being finance with foreign -controlled capital all of the above are true d) Answer d) 37 There is an intimate relationship between a country 's BCA and how the country finances its domestic investment and pays for government expenditures. This relationship is given by BCA = X - M = (S - I) + (T - G). Given this, in order for a country to reduce a BCA deficit, which of the following must occur? a) For a given level of S and I, the government budget deficit (Treduced -G) must be b) c) d) Answer d) Explain how each of the following transactions will be classified and recorded in the debit and credit of the U.S. balance of payments: (1) A Japaneseinsurance company purchases U.S. Treasury bonds and pays out of its bank account kept in New York City.(2) A U.S. citizen consumes a meal at a restaurant in Paris and pays with her American Express card.(3) A Indian immigrant living in Los Angeles sends a check drawn on his L.A. bank account as a gift to his parents living in Bombay.(4) A U.S. computer programmer is hired by a British company for consulting and gets paid from the U.S. bank account maintained by the British company.For a given level of I and (T - G), S must be increased For a given level of S and (T - G), I must fall All of the above would work to reduce a BCA deficit In contrast to the U.S., Japan has realized continuous current account surpluses. What could be the main causes for these surpluses? Is it desirable to have continuous current account surpluses?。