国际金融英文版习题chapter2
1International 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 foreign 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 deficitsB. $25 million deficitsC. $20 million deficitsD. $5 million deficits2. If a country’s domestic saving is greater than domestic investment, the country probably has __________.A. a current account surplusB. a net capital outflowC. a current account deficitD. Both A and B are possible.3. A debit entry in the balance-of-payments account represents a transaction that __________.A. a domestic 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 nation’s foreign exchange reserves4. In terms of balance-of-payments account, which of the following would be recorded as 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. resident's account at a foreign bank5. A balance-of-payments deficit is defined as a situation in which __________.A. the value of payments 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 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, 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 country’s foreign exchange re serves in a certain period of timeB. a country’s foreign trades between the residents of a country and its non-residents for a given period of timeC. all economic and financial transactions between the residents of a country and its non-residents for a given period of timeD. a country’s capital inflows and outflows at a particular date in a 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 positionB. the British international investment positionC. both countries’ international investment positionD. None of the above. This is because both countries’ international inv estment 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 China’s balance-of-payments account?A. A U.S. embassy in Beijing 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 the U.S. runs current account deficits, we can expect that __________.A. it may act as a net debtor in the rest of the worldB. its domestic saving may less than its domestic investmentC. its domestic production is less than its domestic consumptionD. all of the above11. The trade deficit means that __________.A. residents are importing more goods than they are exportingB. residents are borrowing more funds than they are lendingC. residents are receiving more payments than they are makingD. residents are producing more goods than they are consuming12. Which of the following is an example of an exchange of financial assets?A. the exchange of butter for wheatB. the exchange of information technologyC. the exchange of a fixed-rate loan for a floating-rate loanD. the exchange of gold for jewelry13. For most countries, the subcategory that typically dominates the current account is __________.A. unilateral transfersB. goods tradeC. income tradeD. services trade14. When categorizing investments for the financial account component of the balance of payments the __________ is an investment where the investor has no incentive to control whereas the __________ is an investment where the investor wants to control over the assets.A. direct investment, portfolio investmentB. direct investment, indirect investmentC. portfolio investment, indirect investmentD. portfolio investment, direct investment15. If a country’s merchandise exports exceed its imports by $50 million, services trade balance is net $30 million and unilateral transfers made in excess of those received by $5 million, what is the country’s current account balance?A. $85 millionB. $75 millionC. $15 millionD. $25 million1. Country A’s BOT is __________.2. Country A’s current account balance is __________.3. Suppose the changes in country A’s official reserves are zero in 2010, its capital and financial account balance MUST be __________.4. If country A’s official reserves are recorded on the credit side by $10 million in 2010, its capital and financial account balance should be __________.5. Based on the assumption of question 4, country A has BOP deficit or surplus in 2010? Explain.6. What is the current account balance of a nation with a government budget deficit of $128 billion, private saving of $806 billion, and domestic capital formation of $777 billion?III. Express the following operations in the Dutch balance of payments in T-accounts:(5 credits for each question, total credits 3 x 5 = 15)a. A Dutch company exports €100,000 goods to a London company for €100,000 in bank deposits.b. An import billed for €150,000 paid with a check drawn on a London bank.c. A Dutch company based in Rotterdam uses €1 million that it was holding in a short-term deposit with its Rotterdam bank to purchase 10-year bonds issued by German government.IV. True or false: (7 credits)A credit entry in the balance of payments represents a demand for local currency whereas a debit entry represents a supply of local currency. You MUST explain your answer.Part IV。
国际金融英文版习题
Chapter1 balance of paymentsBalance of Payments Accounting1Balance of paymentsa)is defined as the statistical record of a country’sinternational transactions over a certain period of timepresented in the form of a double-entry bookkeepingb)provides detailed information concerning the demand and supplyof a country’s currencyc)can be used to evaluate the performance of a country ininternational economic competitiond)all of the aboveAnswer: d2Generally speaking, any transaction that results in a receipt from foreignersa)Will be recorded as a debit, with a negative sign, in the U.S.balance of paymentsb)Will be recorded as a debit, with a positive sign, in the U.S.balance of paymentsc)Will be recorded as a credit, with a negative sign, in the U.S.balance of paymentsd)Will be recorded as a credit, with a positive sign, in the U.S.balance of paymentsAnswer d3 Generally speaking, any transaction that results in a payment to foreignerse)Will be recorded as a debit, with a negative sign, in the U.S.balance of paymentsf)Will be recorded as a debit, with a positive sign, in the U.S.balance of paymentsg)Will be recorded as a credit, with a negative sign, in the U.S.balance of paymentsh)Will be recorded as a credit, with a positive sign, in the U.S.balance of paymentsAnswer a)4 Suppose the McDonalds Corporation imports 100 tons of Canadian beef, paying for it by transferring the funds to a New York bank account kept by the Canadian Beef Conglomerate.i)Payment by McDonalds will be recorded as a debitj)The deposit of the funds by the seller will be recorded as a debitk)Payment by McDonalds will be recorded as a creditl)The deposit of the funds by the buyer will be credit Answer: a5Since the balance of payments is presented as a system of double-entry bookkeeping,a)Every credit in the account is balanced by a matching debitb)Every debit in the account is balanced by a matching creditc)a) and b) are both trued)None of the aboveAnswer c)6 A country’s international transactions can be grouped into thefollowing three main types:a)current account, medium term account, and long term capitalaccountb)current account, long term capital account, and officialreserve accountc)current account, capital account, and official reserveaccountd)capital account, official reserve account, trade account Answer: c7Invisible trade refers to:a)services that avoid tax paymentsb)underground economyc)legal, consulting, and engineering servicesd)tourist expenditures, onlyAnswer: c8The current account is divided into four finer categories:a)Merchandise trade, services, income, and statisticaldiscrepancy.b)Merchandise trade, services, income, and unilateraltransfersc)Merchandise trade, services, portfolio investment, andunilateral transfersd)Merchandise trade, services, factor income, and directinvestmentAnswer: b9Factor incomea)Consists largely of interest, dividends, and other incomeon foreign investments.b)Is a theoretical construct of the factors of production,land, labor, capital, and entrepreneurial ability.c)Is generally a very minor part of national income accounting,smaller than the statistical discrepancy.d)None of the aboveAnswer: aUSE THE FOLLOWING INFORMATION TO ANSWER THE NEXT TWO QUESTIONS10 The entries 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)- services11Current account includesa)(i), (ii), and (iii)b)(ii), (iii), and (vii)c)(iv), (v), and (vii)d)(i), (v), and (vi)Answer: b12Capital account includesa)(i), (ii), and (iii)b)(ii), (iii), and (vii)c)(iv), (v), and (vii)d)(i), (v), and (vi)Answer: d13The difference between Foreign Direct Investment and Portfolio Investment is that:a)Portfolio Investment mostly represents the sale and purchaseof foreign financial assets such as stocks and bonds that donot involve a transfer of control.b)Foreign Direct Investment mostly represents the sale andpurchase of foreign financial assets such as stocks whereas Portfolio Investment mostly involves the sales and purchase of foreign bonds.c)Foreign direct investment is about buying land and buildingfactories, whereas portfolio investment is about buying stocks and bonds.d)All of the aboveAnswer: a14In the latter half of the 1980s, with a strong yen, Japanese firmsa)Faced difficulty exportingb)Could better afford to acquire U.S. assets that had become lessexpensive in terms of yen.c)Financed a sharp increase in Japanese FDI in the United Statesd)All of the aboveAnswer: d15International portfolio investments have boomed in recent years, as a result ofa)A depreciating U.S. dollarb)Increased gasoline and other commodity prices.c)The general relaxation of capital controls and regulation inmany countriesd)None of the aboveAnswer: cAnswer: c)16The capital account measuresa)The sum of U.S. sales of assets to foreigners and U.S. purchasesof foreign assets.b)The difference between U.S. sales of assets to foreigners andU.S. purchases of foreign assets.c)The difference between U.S. sales of manufactured goods toforeigners and U.S. purchases of foreign products.d)None of the aboveAnswer: b) page 6417When Honda, a Japanese auto maker, built a factory in Ohio,a)It was engaged in foreign direct investmentb)It was engaged in portfolio investmentc)It was engaged in a cross-border acquisitiond)None of the above.Answer: a) page 64.18The capital account may be divided into three categories:a)Cross-border mergers and acquisitions, portfolio investment,and other investmentb)Direct investment, portfolio investment, and Cross-bordermergers and acquisitionsc)Direct investment, mergers and acquisitions, and otherinvestmentd)Direct investment, portfolio investment, and other investment Answer: d)19When Nestlé, a Swiss firm, bought the American firm Carnation, it was engaged in foreign direct investment. If Nestlé had only boughta non-controlling number of shares of the firma)Nestlé would have been engaged in portfolio investmentb)Nestlé wo uld have been engaged in a cross-border acquisitionc)It would depend if they bought the shares from an American ora Canadiand)None of the above.Answer: a)20Foreign direct investment (FDI) occursa)when an investor acquires a measure of control of a foreignbusinessb)when there is an acquisition, by a foreign entity in the U.S.,of 10 percent or more of the voting shares of a businessc)with sales and purchases of foreign stocks and bonds that donot involve a transfer of controld)a and bAnswer: d21Statistical discrepancy, which by definition represents errors and omissionsa)Cannot be calculated directlyb)Is calculated by taking into account the balance-of-paymentsidentityc)Probably has some elements that are honest mistakes, it can’tall be money laundering and drugs.d)All of the aboveAnswer: d)22The statistical discrepancy in the balance-of-payments accountsa)Arise since recordings of payments and receipts are done atdifferent times, in different places, possibly using different methods.b)Arise since some transactions (illegal transactions?) occur“off the books”.c)Represents omitted and misrecorded transactions.d)All of the aboveAnswer: d)23Regarding the statistical discrepancy in the balance-of-payments accountsa)There is some evidence that financial transactions may be mainlyresponsible for the discrepancy.b)The sum of the balance on the capital account and the statisticaldiscrepancy is very close to the balance of the current accountin magnitude.c)It tends to be positive one year and negative in others, so it’ssafe to ignore itd)a) and b)Answer: d)24When a country must make a net payment to foreigners because ofa balance-of-payments deficit, the central bank of the countrya)Should do nothingb)Should run down its official reserve assets (e.g. gold, foreignexchanges, and SDRs)c)Should borrow anew from foreign central banks.d)b) or c) will workAnswer: d)25Continued U.S. trade deficits coupled with foreigners’ desire to diversify their currency holdings away from U.S. dollarsa)could further diminish the position of the dollar as thedominant reserve currencyb)could affect the value of U.S. dollar (e.g. through the currencydiversification decisions of Asian central banks)c)Could lend steam to the emergence of the euro as a crediblereserve currencyd)All of the aboveAnswer: d26Currently, international reserve assets are comprised ofa)gold, platinum, foreign exchanges, and special drawing rights(SDRs)b)gold, foreign exchanges, special drawing rights (SDRs), andreserve positions in the International Monetary Fund (IMF)c)gold, diamonds, foreign exchanges, and special drawing rights(SDRs)d)reserve positions in the International Monetary Fund (IMF),onlyAnswer: b27International reserve assets include “foreign exchanges”. These area)Special Drawing Rights (SDRs) at the IMFb)reserve positions in the International Monetary Fund (IMF)c)Foreign currency held by a country’s central bankd)None of the aboveAnswer: c28The most important international reserve asset, comprising 94 percent of the total reserve assets held by IMF member countries isa)Goldb)Foreign exchangesc)Special Drawing Rights (SDRs)d)Reserve positions in the International Monetary Fund (IMF) Answer: b29The vast majority of the foreign-exchange reserves held by central banks are denominated ina)Local currenciesb)U.S. dollarsc)Yend)EuroAnswer: b30The U.S. Trade Deficita)Is a capital account surplusb)Is a current account deficitc)Is both a capital account surplus and a current account deficitd)None of the aboveAnswer: c31Over the last several years the U.S. has run persistenta)Balance-of-payments deficitsb)Balance-of-payments surplusesc)Current Account deficitsd)Capital Account deficitsAnswer: c32More important than he absolute size of a country’sbalance-of-payments disequilibriuma)is the nature and cause of the disequilibriumb)is whether it is a trade surplus or deficitc)is whether the local government is mercantilist or notd)Nothing is more important than he absolute size of a country’sbalance-of-payments disequilibriumAnswer: aThe Relationship between Balance of Payments and National Income Accounting For questions in this section, the notation isY = GNP = national incomeC = consumptionI = private investmentG = government spendingX = exportsM = imports33National income, or Gross National Product is given by:a)GNP = Y = C + I + G + X + Mb)GNP = Y = C + I + G + X – Mc)GNP = I = C + Y + G + X – Md)GNP = Y = C + I + X + M – GAnswer: b)34Which of the following is a true statement?a)BCA ≡ X – Mb)BKA ≡ X – Mc)BKA –BCA ≡ X – Md)BKA ≡ X – MAnswer a)35There is an intimate relationship betwe en a country’s BCA and how the country finances its domestic investment and pays forgovernment expenditures. This relationship is given by BCA ≡ X –M ≡ (S – I) + (T – G). Given this, which of the following is a true statement?a)If (S – I) < 0, it implies that a country’s domestic savingsis insufficient to finance domestic investment.b) If (T –G) < 0, it implies that a country’s tax revenue isinsufficient to finance government spendingc)both a) and b) are trued)none of the aboveAnswer c)36There is an intim ate relationship between a country’s BCA and how the country finances its domestic investment and pays forgovernment expenditures. This relationship is given by BCA ≡ X –M ≡ (S – I) + (T – G). Given this, which of the following is a true statement?a)If (S –I) < 0, it implies that a country’s domestic savingsis insufficient to finance domestic investment.b) If (T –G) < 0, it implies that a country’s tax revenue isinsufficient to finance government spendingc)when BCA is negative, it implies that government budget deficitsan/or part of domestic investment are being finance withforeign-controlled capitald)all of the above are trueAnswer d)37There is an intimate relationship between a country’s BCA and how the country finances its domestic investment and pays forgovernment 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 (T– G) must be reducedb)For a given level of I and (T – G), S must be increasedc)For a given level of S and (T – G), I must falld)All of the above would work to reduce a BCA deficitAnswer 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 Japanese insurance company purchases U.S. Treasury bonds andpays out of its bank account kept in New York City.(2) A U.S. citizen consumes a meal at a restaurant in Paris and payswith her American Express card.(3) A Indian immigrant living in Los Angeles sends a check drawn onhis 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 consultingand gets paid from the U.S. bank account maintained by the British company.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?。
国际金融英文chapter 2
Chapter 2
Payments among Nations 国际收支
Balance of payments 国际收支平衡表
The set of accounts recording all flows of value between a nation’s residents and the residents of the rest of the world during a period of time. 一个国家的居民与非居民一定时期内的全部国 际经济交易。
Balanபைடு நூலகம்e of payments
The main kinds of flows in the balance of payments accounts
Merchandise trade flows Service flows Income flows Unilateral transfers (gifts) Private capital flows Official reserve asset flows
The Current Account (CA) Balance
3.Domestic production (Y) versus national expenditure (E). Y = C + Id + G +(X – M), E = C + Id + G, and CA = (X – M) approximately, so that CA = Y – E
国际金融英文版习题
Chapter1 balance of paymentsBalance of Payments Accounting1Balance of paymentsa)is defined as the statistical record of a country’s international transactions over acertain period of time presented in the form of a double-entry bookkeepingb)provides detailed information concerning the demand and supply of a country’scurrencyc)can be used to evaluate the performance of a country in international economiccompetitiond)all of the aboveAnswer: d2Generally speaking, any transaction that results in a receipt from foreignersa)Will be recorded as a debit, with a negative sign, in the U.S. balance of paymentsb)Will be recorded as a debit, with a positive sign, in the U.S. balance of paymentsc)Will be recorded as a credit, with a negative sign, in the U.S. balance ofpaymentsd)Will be recorded as a credit, with a positive sign, in the U.S. balance of payments Answer d3 Generally speaking, any transaction that results in a payment to foreignerse)Will be recorded as a debit, with a negative sign, in the U.S. balance of paymentsf)Will be recorded as a debit, with a positive sign, in the U.S. balance of paymentsg)Will be recorded as a credit, with a negative sign, in the U.S. balance ofpaymentsh)Will be recorded as a credit, with a positive sign, in the U.S. balance of payments Answer a)4 Suppose the McDonalds Corporation imports 100 tons of Canadian beef, paying for it by transferring the funds to a New York bank account kept by the Canadian Beef Conglomerate.i)Payment by McDonalds will be recorded as a debitj)The deposit of the funds by the seller will be recorded as a debitk)Payment by McDonalds will be recorded as a creditl)The deposit of the funds by the buyer will be creditAnswer: a5Since the balance of payments is presented as a system of double-entry bookkeeping,a)Every credit in the account is balanced by a matching debitb)Every debit in the account is balanced by a matching creditc)a) and b) are both trued)None of the aboveAnswer c)6 A country’s international transactions can be grouped into the following threemain types:a)current account, medium term account, and long term capital accountb)current account, long term capital account, and official reserve accountc)current account, capital account, and official reserve accountd)capital account, official reserve account, trade accountAnswer: c7Invisible trade refers to:a)services that avoid tax paymentsb)underground economyc)legal, consulting, and engineering servicesd)tourist expenditures, onlyAnswer: c8The current account is divided into four finer categories:a)Merchandise trade, services, income, and statistical discrepancy.b)Merchandise trade, services, income, and unilateral transfersc)Merchandise trade, services, portfolio investment, and unilateral transfersd)Merchandise trade, services, factor income, and direct investment Answer: b9Factor incomea)Consists largely of interest, dividends, and other income on foreigninvestments.b)Is a theoretical construct of the factors of production, land, labor, capital,and entrepreneurial ability.c)Is generally a very minor part of national income accounting, smaller thanthe statistical discrepancy.d)None of the aboveAnswer: aUSE THE FOLLOWING INFORMA TION TO ANSWER THE NEXT TWO QUESTIONS10 The entries 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)- services11Current account includesa)(i), (ii), and (iii)b)(ii), (iii), and (vii)c)(iv), (v), and (vii)d)(i), (v), and (vi) Answer: b12Capital account includesa)(i), (ii), and (iii)b)(ii), (iii), and (vii)c)(iv), (v), and (vii)d)(i), (v), and (vi)Answer: d13The difference between Foreign Direct Investment and Portfolio Investment is that:a)Portfolio Investment mostly represents the sale and purchase of foreign financialassets such as stocks and bonds that do not involve a transfer of control.b)Foreign Direct Investment mostly represents the sale and purchase of foreignfinancial assets such as stocks whereas Portfolio Investment mostly involves thesales and purchase of foreign bonds.c)Foreign direct investment is about buying land and building factories, whereasportfolio investment is about buying stocks and bonds.d)All of the aboveAnswer: a14In the latter half of the 1980s, with a strong yen, Japanese firmsa)Faced difficulty exportingb)Could better afford to acquire U.S. assets that had become less expensive interms of yen.c)Financed a sharp increase in Japanese FDI in the United Statesd)All of the aboveAnswer: d15International portfolio investments have boomed in recent years, as a result ofa) A depreciating U.S. dollarb)Increased gasoline and other commodity prices.c)The general relaxation of capital controls and regulation in many countriesd)None of the aboveAnswer: cAnswer: c)16The capital account measuresa)The sum of U.S. sales of assets to foreigners and U.S. purchases of foreignassets.b)The difference between U.S. sales of assets to foreigners and U.S. purchases offoreign assets.c)The difference between U.S. sales of manufactured goods to foreigners and U.S.purchases of foreign products.d)None of the aboveAnswer: b) page 6417When Honda, a Japanese auto maker, built a factory in Ohio,a)It was engaged in foreign direct investmentb)It was engaged in portfolio investmentc)It was engaged in a cross-border acquisitiond)None of the above.Answer: a) page 64.18The capital account may be divided into three categories:a)Cross-border mergers and acquisitions, portfolio investment, and otherinvestmentb)Direct investment, portfolio investment, and Cross-border mergers andacquisitionsc)Direct investment, mergers and acquisitions, and other investmentd)Direct investment, portfolio investment, and other investmentAnswer: d)19When Nestlé, a Swiss firm, bought the American firm Carnation, it was engaged in foreign direct investment. If Nestlé had only bought a non-controlling number ofshares of the firma)Nestlé would have been engaged in portfolio investmentb)Nestlé would have been engaged in a cross-border acquisitionc)It would depend if they bought the shares from an American or a Canadiand)None of the above.Answer: a)20Foreign direct investment (FDI) occursa)when an investor acquires a measure of control of a foreign businessb)when there is an acquisition, by a foreign entity in the U.S., of 10 percent ormore of the voting shares of a businessc)with sales and purchases of foreign stocks and bonds that do not involve atransfer of controld) a and bAnswer: d21Statistical discrepancy, which by definition represents errors and omissionsa)Cannot be calculated directlyb)Is calculated by taking into account the balance-of-payments identityc)Probably has some elements that are honest mistakes, it can’t all be moneylaundering and drugs.d)All of the aboveAnswer: d)22The statistical discrepancy in the balance-of-payments accountsa)Arise since recordings of payments and receipts are done at different times, indifferent places, possibly using different methods.b)Arise since some transactions (illegal transactions?) occur “off the books”.c)Represents omitted and misrecorded transactions.d)All of the aboveAnswer: d)23Regarding the statistical discrepancy in the balance-of-payments accountsa)There is some evidence that financial transactions may be mainly responsible forthe discrepancy.b)The sum of the balance on the capital account and the statistical discrepancy isvery close to the balance of the current account in magnitude.c)It tends to be positive one year and negative in others, so it’s safe to ignore itd)a) and b)Answer: d)24When a country must make a net payment to foreigners because of a balance-of-payments deficit, the central bank of the countrya)Should do nothingb)Should run down its official reserve assets (e.g. gold, foreign exchanges, andSDRs)c)Should borrow anew from foreign central banks.d)b) or c) will workAnswer: d)25Continued U.S. trade deficits coupled with foreigners’ desire to diversify their currency holdings away from U.S. dollarsa)could further diminish the position of the dollar as the dominant reserve currencyb)could affect the value of U.S. dollar (e.g. through the currency diversificationdecisions of Asian central banks)c)Could lend steam to the emergence of the euro as a credible reserve currencyd)All of the aboveAnswer: d26Currently, international reserve assets are comprised ofa)gold, platinum, foreign exchanges, and special drawing rights (SDRs)b)gold, foreign exchanges, special drawing rights (SDRs), and reserve positions inthe International Monetary Fund (IMF)c)gold, diamonds, foreign exchanges, and special drawing rights (SDRs)d)reserve positions in the International Monetary Fund (IMF), onlyAnswer: b27International reserve assets include “foreign exchanges”. These area)Special Drawing Rights (SDRs) at the IMFb)reserve positions in the International Monetary Fund (IMF)c)Foreign currency held by a country’s central bankd)None of the aboveAnswer: c28The most important international reserve asset, comprising 94 percent of the total reserve assets held by IMF member countries isa)Goldb)Foreign exchangesc)Special Drawing Rights (SDRs)d)Reserve positions in the International Monetary Fund (IMF)Answer: b29The vast majority of the foreign-exchange reserves held by central banks are denominated ina)Local currenciesb)U.S. dollarsc)Yend)EuroAnswer: b30The U.S. Trade Deficita)Is a capital account surplusb)Is a current account deficitc)Is both a capital account surplus and a current account deficitd)None of the aboveAnswer: c31Over the last several years the U.S. has run persistenta)Balance-of-payments deficitsb)Balance-of-payments surplusesc)Current Account deficitsd)Capital Account deficitsAnswer: c32More important than he absolute size of a country’s balance-of-payments disequilibriuma)is the nature and cause of the disequilibriumb)is whether it is a trade surplus or deficitc)is whether the local government is mercantilist or notd)Nothing is more important than he absolute size of a country’sbalance-of-payments disequilibriumAnswer: aThe Relationship between Balance of Payments and National Income AccountingFor questions in this section, the notation isY = GNP = national incomeC = consumptionI = private investmentG = government spendingX = exportsM = imports33National income, or Gross National Product is given by:a)GNP = Y = C + I + G + X + Mb)GNP = Y = C + I + G + X – Mc)GNP = I = C + Y + G + X – Md)GNP = Y = C + I + X + M – GAnswer: b)34Which of the following is a true statement?a)BCA ≡ X – Mb)BKA ≡ X – Mc)BKA –BCA ≡ X – Md)BKA ≡ X – MAnswer a)35There is an intimate relationship between a country’s BCA and how the country finances its domestic investment and pays for government expenditures. Thisrelationship is given by BCA ≡ X –M ≡ (S – I) + (T – G). Given this, which of thefollowing is a true statement?a)If (S –I) < 0, it implies that a country’s domestic savings is insufficient tofinance domestic investment.b)If (T –G) < 0, it implies that a country’s tax reven ue is insufficient to financegovernment spendingc)both a) and b) are trued)none of the aboveAnswer c)36There is an intimate relationship between a country’s BCA and how the country finances its domestic investment and pays for government expenditures. Thisrelationship is given by BCA ≡ X –M ≡ (S – I) + (T – G). Given this, which of thefollowing is a true statement?a)If (S –I) < 0, it implies that a country’s domestic savings is insufficient tofinance domestic investment.b)If (T – G) < 0, it implies that a country’s tax revenue is insufficient to financegovernment spendingc)when BCA is negative, it implies that government budget deficits an/or part ofdomestic investment are being finance with foreign-controlled capitald)all of the above are trueAnswer d)37There is an intimate relationship between a country’s BCA and how the country finances its domestic investment and pays for government expenditures. Thisrelationship is given by BCA ≡ X –M ≡ (S – I) + (T – G). Given this, in order for acountry to reduce a BCA deficit, which of the following must occur?a)For a given level of S and I, the government budget deficit (T – G) must bereducedb)For a given level of I and (T – G), S must be increasedc)For a given level of S and (T – G), I must falld)All of the above would work to reduce a BCA deficitAnswer 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 Japanese insurance company purchases U.S. Treasury bonds and pays out of itsbank account kept in New York City.(2) A U.S. citizen consumes a meal at a restaurant in Paris and pays with her AmericanExpress card.(3) A Indian immigrant living in Los Angeles sends a check drawn on his L.A. bankaccount as a gift to his parents living in Bombay.(4) A U.S. computer programmer is hired by a British company for consultingand gets paid from the U.S. bank account maintained by the British company.In contrast to the U.S., Japan has realized continuous current account surpluses. Whatcould be the main causes for these surpluses? Is it desirable to have continuous current account surpluses?。
国际金融英文版习题
Chapter1 balance of paymentsBalance of Payments Accounting1Balance of paymentsa)is defined as the statistical record of a country’sinternational transactions over a certain period of timepresented in the form of a double-entry bookkeepingb)provides detailed information concerning the demand and supplyof a country’s currencyc)can be used to evaluate the performance of a country ininternational economic competitiond)all of the aboveAnswer: d2Generally speaking, any transaction that results in a receipt from foreignersa)Will be recorded as a debit, with a negative sign, in the U.S.balance of paymentsb)Will be recorded as a debit, with a positive sign, in the U.S.balance of paymentsc)Will be recorded as a credit, with a negative sign, in the U.S.balance of paymentsd)Will be recorded as a credit, with a positive sign, in the U.S.balance of paymentsAnswer d3 Generally speaking, any transaction that results in a payment to foreignerse)Will be recorded as a debit, with a negative sign, in the U.S.balance of paymentsf)Will be recorded as a debit, with a positive sign, in the U.S.balance of paymentsg)Will be recorded as a credit, with a negative sign, in the U.S.balance of paymentsh)Will be recorded as a credit, with a positive sign, in the U.S.balance of paymentsAnswer a)4 Suppose the McDonalds Corporation imports 100 tons of Canadian beef, paying for it by transferring the funds to a New York bank account kept by the Canadian Beef Conglomerate.i)Payment by McDonalds will be recorded as a debitj)The deposit of the funds by the seller will be recorded as a debitk)Payment by McDonalds will be recorded as a creditl)The deposit of the funds by the buyer will be credit Answer: a5Since the balance of payments is presented as a system of double-entry bookkeeping,a)Every credit in the account is balanced by a matching debitb)Every debit in the account is balanced by a matching creditc)a) and b) are both trued)None of the aboveAnswer c)6 A country’s international transactions can be grouped into thefollowing three main types:a)current account, medium term account, and long term capitalaccountb)current account, long term capital account, and officialreserve accountc)current account, capital account, and official reserveaccountd)capital account, official reserve account, trade account Answer: c7Invisible trade refers to:a)services that avoid tax paymentsb)underground economyc)legal, consulting, and engineering servicesd)tourist expenditures, onlyAnswer: c8The current account is divided into four finer categories:a)Merchandise trade, services, income, and statisticaldiscrepancy.b)Merchandise trade, services, income, and unilateraltransfersc)Merchandise trade, services, portfolio investment, andunilateral transfersd)Merchandise trade, services, factor income, and directinvestmentAnswer: b9Factor incomea)Consists largely of interest, dividends, and other incomeon foreign investments.b)Is a theoretical construct of the factors of production,land, labor, capital, and entrepreneurial ability.c)Is generally a very minor part of national income accounting,smaller than the statistical discrepancy.d)None of the aboveAnswer: aUSE THE FOLLOWING INFORMATION TO ANSWER THE NEXT TWO QUESTIONS10 The entries 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)- services11Current account includesa)(i), (ii), and (iii)b)(ii), (iii), and (vii)c)(iv), (v), and (vii)d)(i), (v), and (vi) Answer: b12Capital account includesa)(i), (ii), and (iii)b)(ii), (iii), and (vii)c)(iv), (v), and (vii)d)(i), (v), and (vi) Answer: d13The difference between Foreign Direct Investment and Portfolio Investment is that:a)Portfolio Investment mostly represents the sale and purchaseof foreign financial assets such as stocks and bonds that do not involve a transfer of control.b)Foreign Direct Investment mostly represents the sale andpurchase of foreign financial assets such as stocks whereas Portfolio Investment mostly involves the sales and purchase of foreign bonds.c)Foreign direct investment is about buying land and buildingfactories, whereas portfolio investment is about buying stocks and bonds.d)All of the aboveAnswer: a14In the latter half of the 1980s, with a strong yen, Japanese firmsa)Faced difficulty exportingb)Could better afford to acquire U.S. assets that had become lessexpensive in terms of yen.c)Financed a sharp increase in Japanese FDI in the United Statesd)All of the aboveAnswer: d15International portfolio investments have boomed in recent years, as a result ofa)A depreciating U.S. dollarb)Increased gasoline and other commodity prices.c)The general relaxation of capital controls and regulation inmany countriesd)None of the aboveAnswer: cAnswer: c)16The capital account measuresa)The sum of U.S. sales of assets to foreigners and U.S. purchasesof foreign assets.b)The difference between U.S. sales of assets to foreigners andU.S. purchases of foreign assets.c)The difference between U.S. sales of manufactured goods toforeigners and U.S. purchases of foreign products.d)None of the aboveAnswer: b) page 6417When Honda, a Japanese auto maker, built a factory in Ohio,a)It was engaged in foreign direct investmentb)It was engaged in portfolio investmentc)It was engaged in a cross-border acquisitiond)None of the above.Answer: a) page 64.18The capital account may be divided into three categories:a)Cross-border mergers and acquisitions, portfolio investment,and other investmentb)Direct investment, portfolio investment, and Cross-bordermergers and acquisitionsc)Direct investment, mergers and acquisitions, and otherinvestmentd)Direct investment, portfolio investment, and other investment Answer: d)19When Nestlé, a Swiss firm, bought the American firm Carnation, it was engaged in foreign direct investment. If Nestlé had only boughta non-controlling number of shares of the firma)Nestlé would have been engaged in portfolio investm entb)Nestlé would have been engaged in a cross-border acquisitionc)It would depend if they bought the shares from an American ora Canadiand)None of the above.Answer: a)20Foreign direct investment (FDI) occursa)when an investor acquires a measure of control of a foreignbusinessb)when there is an acquisition, by a foreign entity in the U.S.,of 10 percent or more of the voting shares of a businessc)with sales and purchases of foreign stocks and bonds that donot involve a transfer of controld)a and bAnswer: d21Statistical discrepancy, which by definition represents errors and omissionsa)Cannot be calculated directlyb)Is calculated by taking into account the balance-of-paymentsidentityc)Probably has some elements that are honest mistakes, it can’tall be money laundering and drugs.d)All of the aboveAnswer: d)22The statistical discrepancy in the balance-of-payments accountsa)Arise since recordings of payments and receipts are done atdifferent times, in different places, possibly using different methods.b)Arise since some transactions (illegal transactions?) occur“off the books”.c)Represents omitted and misrecorded transactions.d)All of the aboveAnswer: d)23Regarding the statistical discrepancy in the balance-of-payments accountsa)There is some evidence that financial transactions may be mainlyresponsible for the discrepancy.b)The sum of the balance on the capital account and the statisticaldiscrepancy is very close to the balance of the current account in magnitude.c)It tends to be positive one year and negative in oth ers, so it’ssafe to ignore itd)a) and b)Answer: d)24When a country must make a net payment to foreigners because ofa balance-of-payments deficit, the central bank of the countrya)Should do nothingb)Should run down its official reserve assets (e.g. gold, foreignexchanges, and SDRs)c)Should borrow anew from foreign central banks.d)b) or c) will workAnswer: d)25Continued U.S. trade deficits coupled with foreigners’ desire to diversify their currency holdings away from U.S. dollarsa)could further diminish the position of the dollar as thedominant reserve currencyb)could affect the value of U.S. dollar (e.g. through the currencydiversification decisions of Asian central banks)c)Could lend steam to the emergence of the euro as a crediblereserve currencyd)All of the aboveAnswer: d26Currently, international reserve assets are comprised ofa)gold, platinum, foreign exchanges, and special drawing rights(SDRs)b)gold, foreign exchanges, special drawing rights (SDRs), andreserve positions in the International Monetary Fund (IMF)c)gold, diamonds, foreign exchanges, and special drawing rights(SDRs)d)reserve positions in the International Monetary Fund (IMF),onlyAnswer: b27International reserve assets include “foreign exchanges”. These area)Special Drawing Rights (SDRs) at the IMFb)reserve positions in the International Monetary Fund (IMF)c)Foreign currency held by a country’s central bankd)None of the aboveAnswer: c28The most important international reserve asset, comprising 94 percent of the total reserve assets held by IMF member countries isa)Goldb)Foreign exchangesc)Special Drawing Rights (SDRs)d)Reserve positions in the International Monetary Fund (IMF) Answer: b29The vast majority of the foreign-exchange reserves held by central banks are denominated ina)Local currenciesb)U.S. dollarsc)Yend)EuroAnswer: b30The U.S. Trade Deficita)Is a capital account surplusb)Is a current account deficitc)Is both a capital account surplus and a current account deficitd)None of the aboveAnswer: c31Over the last several years the U.S. has run persistenta)Balance-of-payments deficitsb)Balance-of-payments surplusesc)Current Account deficitsd)Capital Account deficitsAnswer: c32More important than he absolute size of a country’sbalance-of-payments disequilibriuma)is the nature and cause of the disequilibriumb)is whether it is a trade surplus or deficitc)is whether the local government is mercantilist or notd)Nothing is more important than he absolute size of a country’sbalance-of-payments disequilibriumAnswer: aThe Relationship between Balance of Payments and National Income Accounting For questions in this section, the notation isY = GNP = national incomeC = consumptionI = private investmentG = government spendingX = exportsM = imports33National income, or Gross National Product is given by:a)GNP = Y = C + I + G + X + Mb)GNP = Y = C + I + G + X – Mc)GNP = I = C + Y + G + X – Md)GNP = Y = C + I + X + M – GAnswer: b)34Which of the following is a true statement?a)BCA ≡ X – Mb)BKA ≡ X – Mc)BKA –BCA ≡ X – Md)BKA ≡ X – MAnswer a)35There is an intimate relationship between a country’s BCA and how the country finances its domestic investment and pays forgovernment expenditures. This relationship is given by BCA ≡ X–M ≡ (S – I) + (T – G). Given this, which of the following is a true statement?a)If (S –I) < 0, it implies that a country’s domestic savingsis insufficient to finance domestic investment.b) If (T –G) < 0, it implies that a country’s tax revenue isinsufficient to finance government spendingc)both a) and b) are trued)none of the aboveAnswer c)36There is an intimate relationship between a country’s BCA and how the country finances its domestic investment and pays forgovernment expenditures. This relationship is given by BCA ≡ X –M ≡ (S – I) + (T – G). Given this, which of the following is a true statement?a)If (S –I) < 0, it implies that a country’s domestic savingsis insufficient to finance domestic investment.b) If (T –G) < 0, it implies that a country’s tax revenue isinsufficient to finance government spendingc)when BCA is negative, it implies that government budget deficitsan/or part of domestic investment are being finance withforeign-controlled capitald)all of the above are trueAnswer d)37There is an intimate relationship between a country’s B CA and how the country finances its domestic investment and pays forgovernment expenditures. This relationship is given by BCA ≡ X–M ≡ (S – I) + (T – G). Given this, in order for a countryto reduce a BCA deficit, which of the following must occur?a)For a given level of S and I, the government budget deficit (T– G) must be reducedb)For a given level of I and (T – G), S must be increasedc)For a given level of S and (T – G), I must falld)All of the above would work to reduce a BCA deficitAnswer 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 Japanese insurance company purchases U.S. Treasury bonds andpays out of its bank account kept in New York City.(2) A U.S. citizen consumes a meal at a restaurant in Paris and payswith her American Express card.(3) A Indian immigrant living in Los Angeles sends a check drawn onhis 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 forconsulting and gets paid from the U.S. bank account maintained by the British company.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?。
国际金融FinanceTestBank2
Chapter 2—International Flow of Funds1. Recently, the U.S. experienced an annual balance of trade representing a ____.large surplus (exceeding $100 billion)a.small surplusb.clevel of zero.deficitd.ANS: D PTS: 12. A high home inflation rate relative to other countries would ____ the home country'scurrent account balance, other things equal. A high growth in the home income levelrelative to other countries would ____ the home country's current account balance, other things equal.aincrease; increase.increase; decreaseb.cdecrease; decrease.decrease; increased.ANS: C PTS: 13. If a country's government imposes a tariff on imported goods, that country's currentaccount balance will likely ____ (assuming no retaliation by other governments).decreasea.bincrease.cremain unaffected.deither A or C are possible.ANS: B PTS: 14. ____ purchases more U.S. exports than the other countries listed here.aItaly.Spainb.cMexico.Canadad.ANS: D PTS: 15. An increase in the current account deficit will place ____ pressure on the home currencyvalue, other things equal.upwarda.bdownward.noc.upward or downward (depending on the size of the deficit)d.ANS: B PTS: 16. If the home currency begins to appreciate against other currencies, this should ____ thecurrent account balance, other things equal (assume that substitutes are readily available in the countries, and that the prices charged by firms remain the same).increasea.bhave no impact on.reducec.dall of the above are equally possible.ANS: C PTS: 17. The International Financial Corporation was established to: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.ANS: D PTS: 18. The World Bank was established to: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.ANS: B PTS: 19. The International Development Association was established to: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.ANS: C PTS: 110. Which of the following would likely have the least direct influence on a country's currentaccount?a.inflation.b.national income.c.exchange rates.d.tariffs.e.a tax on income earned from foreign stocks.ANS: E PTS: 111. The "J curve" effect describes:a . the continuous long-term inverse relationship between a country's current account balance and the country's growth in gross national product.b . the short-run tendency for a country's balance of trade to deteriorate even while its currency is depreciating.c . the tendency for exporters to initially reduce the price of goods when their own currency appreciates.d . the reaction of a country's currency to initially depreciate after the country's inflation rate declines.ANS: B PTS: 112. An increase in the use of quotas is expected to: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.ANS: B PTS: 113. The U.S. typically has a balance-of-trade surplus in its trade with ____.a.Chinab.Japanc.A and Bd none of the aboveANS: D PTS: 114. The North American Free Trade Agreement (NAFTA) increased restrictions on:a.trade between Canada and Mexico.b.trade between Canada and the U.S.c.direct foreign investment in Mexico by U.S. firms.d.none of the above.ANS: D PTS: 115. According to the text, international trade (exports plus imports combined) as a percentageof GDP is:a.higher in the U.S. than in European countries.b.lower in the U.S. than in European countries.c . higher in the U.S. than in about half the European countries, and lower in the U.S. than the others.d.about the same in the U.S. as in European countries.ANS: B PTS: 116. The direct foreign investment positions by U.S. firms have generally ____ over time; thedirect foreign investment positions in the U.S. by non-U.S. firms have generally ____ over time.a.increased; increasedb.increased; decreasedc.decreased; decreasedd.decreased; increasedANS: A PTS: 117. Which of the following is the biggest target of direct foreign investment by U.S. firms?Mexico.a.Japan.b.cUnited Kingdom..Germany.d.ANS: C PTS: 118. The primary component of the current account is the:balance of trade.a.bbalance of money market flows..balance of capital market flows.c.dunilateral transfers..ANS: A PTS: 119. As a result of the European Union, restrictions on exports between ____ were reduced oreliminated.amember countries and the U.S..member countriesb.cmember countries and European non-members.none of the aboved.ANS: B PTS: 120. Over the last several years, international trade (exports plus imports) as a percentage ofGDP has generally:aincreased for most major countries..decreased for most major countries.b.cstayed about constant for most major countries..increased for about half the major countries and decreased for the others.d.ANS: A PTS: 121. Which is not a concern about the North American Free Trade Agreement (NAFTA)?its impact on U.S. inflation.a.bits impact on U.S. unemployment..lower environmental standards in Mexico.c.different health laws for workers in Mexico.d.ANS: A PTS: 122. A General Agreement on Tariffs and Trade (GATT) accord in 1993 called for:aincreased trade restrictions outside of North America..lower trade restrictions around the world.b.uniform environmental standards around the world.c.uniform worker health laws.d.ANS: B PTS: 123. Which of the following is mentioned in the text as a possible means by which thegovernment may attempt to improve its balance of trade position (increase its exports or reduce its imports).It could attempt to strengthen its local currency value.a.b . Firms based in a country receive subsidies from their government, produce products, and then export those products at a cheap price.c . Firms based in one country are allowed by their government to offer bribes to large customers when pursuing business deals in a particular industry.d.All of the above are mentioned.ANS: A PTS: 124. The demand for U.S. exports tends to increase when:a.economic growth in foreign countries decreases.b.the currencies of foreign countries strengthen against the dollar.c.U.S. inflation rises.d.none of the above.ANS: B PTS: 125. "Dumping" is used in the text to represent the: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.ANS: D PTS: 126. ____ is (are) income received by investors on foreign investments in financial assets(securities).a.Portfolio incomeb.Direct foreign incomec.Unilateral transfersd.Factor incomeANS: D PTS: 127. A weak home currency may not be a perfect solution to correct a balance of trade deficitbecause:a.it reduces the prices of imports paid by local companies.b.it increases the prices of exports by local companies.c.it prevents international trade transactions from being prearranged.d . foreign companies may reduce the prices of their products to stay competitive.ANS: D PTS: 128. Intracompany trade makes up approximately ____ percent of all international trade.a.50b.70c.25d.13e.5ANS: A PTS: 129. Like the International Monetary Fund (IMF), the ____ is composed of a collection ofnations as members. However, unlike the IMF, it uses the private rather than thegovernment sector to achieve its objectives.a.World Bankb.International Financial Corporation (IFC)c.World Trade Organization (WTO)dInternational Development Association (IDA).Bank for International Settlements (BIS)e.ANS: B PTS: 130. The World Bank's Multilateral Investment Guarantee Agency (MIGA):aoffers various forms of export insurance..offers various forms of import insurance.b.coffers various forms of exchange rate risk insurance..provides loans to developing countries.d.offers various forms of political risk insurance.e.ANS: E PTS: 131. Also known as the "central banks' central bank," the ____ attempts to facilitatecooperation among countries with regard to international transactions and provides assistance to countries experiencing a financial crisis.World Banka.bInternational Financial Corporation (IFC).World Trade Organizationc.dInternational Development Association (IDA).Bank for International Settlements (BIS)e.ANS: E PTS: 132. Direct foreign investment into the U.S. represents a ____.capital inflowa.b trade inflow.ccapital outflow.trade outflowd.ANS: A PTS: 147. A country's net outflow of funds ____ affect its interest rates, and ____ affect itseconomic conditions.does; doesa.bdoes; does not.does not; does notc.does not; doesd.ANS: A PTS: 151. In recent years, the U.S. has had a relatively (compared to other countries) ____ balanceof trade ____ with China.small; surplusa.blarge; surplus.small; deficitc.large; deficitd.ANS: D PTS: 155. Assume the U.S. has a balance of trade surplus with the Country of Thor. Whenindividuals in Thor manufacture CDs and DVDs that look almost exactly like the original product produced in the U.S. and other countries, they ____ the U.S. balance of trade surplus with Thor. This activity is called ____.areduce; flipping.breduce; pirating.increase; piratingc.dincrease; flipping.ANS: B PTS: 156. Japan's annual interest rate has been relatively ____ compared to other countries forseveral years, because the supply of funds in its credit market has been very ____.alow; small.high; smallb.clow; large.high; larged.ANS: C PTS: 157. Without the international capital flows, there would be ____ funding available in the U.S.across all risk levels, and the cost of funding would be ____ regardless of the firm's risk level.more; lowera.bmore; higher.less; lowerc.less; higherd.ANS: D PTS: 166. The ____ is the difference between exports and imports.abalance of trade.b balance on goods and services.cbalance of payments.current accountd.ecapital account.ANS: A PTS: 167. Which of the following will probably not result in an increase in a country's currentaccount balance (assuming everything else constant)?aA decrease in the country's rate of inflation.A decrease in the country's national income levelb.cAn increase in government restrictions in the form of tariffs or quotas .An appreciation of the country's currencyd.eAll of the above will result in an increased current account balance..ANS: D PTS: 168. Which of the following factors probably does not directly affect a country's capitalaccount and its components?Inflationa.Interest ratesb.cWithholding taxes on foreign income.Exchange rate movementsd.eAll of the above will directly affect a country's capital account..ANS: A PTS: 169. The ____, an accord among 117 nations, called for lower tariffs around the world.a.General Agreement on Tariffs and Trade (GATT)b.North American Free Trade Agreement (NAFTA)c.Single European Act of 1987d.European Union Accorde.None of the aboveANS: A PTS: 170. Which of the following is not a "subtle" trade restriction Country X may use againstCountry Y?a.The government of Country X eliminates environmental restrictions.b . The government of Country X subsidizes firms in its country to facilitate dumping.c . The government of Country X provides tax breaks to firms in specific industries.d . The government of Country X imposes a tariff on goods imported from Country Y.e . The government of Country X allows its firms to offer bribes to large customers when pursuing business deals.ANS: D PTS: 171. Which of the following statements is not true?a . Exporters may 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. ANS: A PTS: 172. Which of the following would increase the current account of Country X? Country Y isCountry X's sole trading partner.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.ANS: D PTS: 173. ____ represent aid, grants, and gifts from one country to another.a.Transfer paymentsb.Factor incomec.The balance of traded.The balance of paymentse.The capital accountANS: A PTS: 174. Which of the following is not a goal of the International Monetary Fund (IMF)?a.To promote cooperation among countries on international monetary issuesb.To promote stability in exchange ratesc . To enhance a country's long-term economic growth via the extension of structural adjustment loansd.To promote free tradee.To promote free mobility of capital funds across countriesANS: C PTS: 175. According to the "J curve effect," a weakening of the U.S. dollar relative to its tradingpartners' currencies would result in an initial ____ in the current account balance,followed by a subsequent ____ in the current account balance.decrease; increasea.increase; decreaseb.cdecrease; decrease.increase; increased.ANS: A PTS: 1。
国际金融英文版习题
Chapter1 balance of paymentsBalance of Payments Accounting1Balance of paymentsa)is defined as the statistical record of a country’s international transactions over acertain period of time presented in the form of a double-entry bookkeepingb)provides detailed information concerning the demand and supply of a country’scurrencyc)can be used to evaluate the performance of a country in international economiccompetitiond)all of the aboveAnswer: d2Generally speaking, any transaction that results in a receipt from foreignersa)Will be recorded as a debit, with a negative sign, in the U.S. balance ofpaymentsb)Will be recorded as a debit, with a positive sign, in the U.S. balance ofpaymentsc)Will be recorded as a credit, with a negative sign, in the U.S. balance ofpaymentsd)Will be recorded as a credit, with a positive sign, in the U.S. balance ofpaymentsAnswer d3 Generally speaking, any transaction that results in a payment to foreignerse)Will be recorded as a debit, with a negative sign, in the U.S. balance ofpaymentsf)Will be recorded as a debit, with a positive sign, in the U.S. balance ofpaymentsg)Will be recorded as a credit, with a negative sign, in the U.S. balance ofpaymentsh)Will be recorded as a credit, with a positive sign, in the U.S. balance ofpaymentsAnswer a)4 Suppose the McDonalds Corporation imports 100 tons of Canadian beef, paying for it by transferring the funds to a New York bank account kept by the Canadian Beef Conglomerate.i)Payment by McDonalds will be recorded as a debitj)The deposit of the funds by the seller will be recorded as a debitk)Payment by McDonalds will be recorded as a creditl)The deposit of the funds by the buyer will be creditAnswer: a5Since the balance of payments is presented as a system of double-entry bookkeeping,a)Every credit in the account is balanced by a matching debitb)Every debit in the account is balanced by a matching creditc)a) and b) are both trued)None of the aboveAnswer c)6 A country’s international transactions can be grouped into the following threemain types:a)current account, medium term account, and long term capital accountb)current account, long term capital account, and official reserve accountc)current account, capital account, and official reserve accountd)capital account, official reserve account, trade accountAnswer: c7Invisible trade refers to:a)services that avoid tax paymentsb)underground economyc)legal, consulting, and engineering servicesd)tourist expenditures, onlyAnswer: c8The current account is divided into four finer categories:a)Merchandise trade, services, income, and statistical discrepancy.b)Merchandise trade, services, income, and unilateral transfersc)Merchandise trade, services, portfolio investment, and unilateral transfersd)Merchandise trade, services, factor income, and direct investment Answer: b9Factor incomea)Consists largely of interest, dividends, and other income on foreigninvestments.b)Is a theoretical construct of the factors of production, land, labor, capital,and entrepreneurial ability.c)Is generally a very minor part of national income accounting, smaller thanthe statistical discrepancy.d)None of the aboveAnswer: aUSE THE FOLLOWING INFORMATION TO ANSWER THE NEXT TWO QUESTIONS10 The entries 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 (v)- other capital (vi)- portfolio investment(vii)- private transfertransfer (viii)- services11Current account includesa)(i), (ii), and (iii)b)(ii), (iii), and (vii)c)(iv), (v), and (vii)d)(i), (v), and (vi)Answer: b12Capital account includesa)(i), (ii), and (iii)b)(ii), (iii), and (vii)c)(iv), (v), and (vii)d)(i), (v), and (vi)Answer: d13The difference between Foreign Direct Investment and Portfolio Investment is that:a)Portfolio Investment mostly represents the sale and purchase of foreignfinancial assets such as stocks and bonds that do not involve a transfer ofcontrol.b)Foreign Direct Investment mostly represents the sale and purchase of foreignfinancial assets such as stocks whereas Portfolio Investment mostly involvesthe sales and purchase of foreign bonds.c)Foreign direct investment is about buying land and building factories, whereasportfolio investment is about buying stocks and bonds.d)All of the aboveAnswer: a14In the latter half of the 1980s, with a strong yen, Japanese firmsa)Faced difficulty exportingb)Could better afford to acquire U.S. assets that had become less expensive interms of yen.c)Financed a sharp increase in Japanese FDI in the United Statesd)All of the aboveAnswer: d15International portfolio investments have boomed in recent years, as a result ofa)A depreciating U.S. dollarb)Increased gasoline and other commodity prices.c)The general relaxation of capital controls and regulation in many countriesd)None of the aboveAnswer: cAnswer: c)16The capital account measuresa)The sum of U.S. sales of assets to foreigners and U.S. purchases of foreignassets.b)The difference between U.S. sales of assets to foreigners and U.S. purchases offoreign assets.c)The difference between U.S. sales of manufactured goods to foreigners and U.S.purchases of foreign products.d)None of the aboveAnswer: b) page 6417When Honda, a Japanese auto maker, built a factory in Ohio,a)It was engaged in foreign direct investmentb)It was engaged in portfolio investmentc)It was engaged in a cross-border acquisitiond)None of the above.Answer: a) page 64.18The capital account may be divided into three categories:a)Cross-border mergers and acquisitions, portfolio investment, and otherinvestmentb)Direct investment, portfolio investment, and Cross-border mergers andacquisitionsc)Direct investment, mergers and acquisitions, and other investmentd)Direct investment, portfolio investment, and other investmentAnswer: d)19When Nestlé, a Swiss firm, bought the American firm Carnation, it was engaged in foreign direct investment. If Nestlé had only bought a non-controlling number of shares of the firma)Nestlé would have been engaged in portfolio investmentb)Nestlé would have been engaged in a cross-border acquisitionc)It would depend if they bought the shares from an American or a Canadiand)None of the above.Answer: a)20Foreign direct investment (FDI) occursa)when an investor acquires a measure of control of a foreign businessb)when there is an acquisition, by a foreign entity in the U.S., of 10 percent ormore of the voting shares of a businessc)with sales and purchases of foreign stocks and bonds that do not involve atransfer of controld)a and bAnswer: d21Statistical discrepancy, which by definition represents errors and omissionsa)Cannot be calculated directlyb)Is calculated by taking into account the balance-of-payments identityc)Probably has some elements that are honest mistakes, it can’t all be moneylaundering and drugs.d)All of the aboveAnswer: d)22The statistical discrepancy in the balance-of-payments accountsa)Arise since recordings of payments and receipts are done at different times, indifferent places, possibly using different methods.b)Arise since some transactions (illegal transactions?) occur “off the books”.c)Represents omitted and misrecorded transactions.d)All of the aboveAnswer: d)23Regarding the statistical discrepancy in the balance-of-payments accountsa)There is some evidence that financial transactions may be mainly responsiblefor the discrepancy.b)The sum of the balance on the capital account and the statistical discrepancy isvery close to the balance of the current account in magnitude.c)It tends to be positive one year and negative in oth ers, so it’s safe to ignore itd)a) and b)Answer: d)24When a country must make a net payment to foreigners because of a balance-of-payments deficit, the central bank of the countrya)Should do nothingb)Should run down its official reserve assets (e.g. gold, foreign exchanges, andSDRs)c)Should borrow anew from foreign central banks.d)b) or c) will workAnswer: d)25Continued U.S. trade deficits coupled with foreigners’ desire to diversify their currency holdings away from U.S. dollarsa)could further diminish the position of the dollar as the dominant reservecurrencyb)could affect the value of U.S. dollar (e.g. through the currency diversificationdecisions of Asian central banks)c)Could lend steam to the emergence of the euro as a credible reserve currencyd)All of the aboveAnswer: d26Currently, international reserve assets are comprised ofa)gold, platinum, foreign exchanges, and special drawing rights (SDRs)b)gold, foreign exchanges, special drawing rights (SDRs), and reserve positions inthe International Monetary Fund (IMF)c)gold, diamonds, foreign exchanges, and special drawing rights (SDRs)d)reserve positions in the International Monetary Fund (IMF), onlyAnswer: b27International reserve assets include “foreign exchanges”. These area)Special Drawing Rights (SDRs) at the IMFb)reserve positions in the International Monetary Fund (IMF)c)Foreign currency held by a country’s central bankd)None of the aboveAnswer: c28The most important international reserve asset, comprising 94 percent of the total reserve assets held by IMF member countries isa)Goldb)Foreign exchangesc)Special Drawing Rights (SDRs)d)Reserve positions in the International Monetary Fund (IMF)Answer: b29The vast majority of the foreign-exchange reserves held by central banks are denominated ina)Local currenciesb)U.S. dollarsc)Yend)EuroAnswer: b30The U.S. Trade Deficita)Is a capital account surplusb)Is a current account deficitc)Is both a capital account surplus and a current account deficitd)None of the aboveAnswer: c31Over the last several years the U.S. has run persistenta)Balance-of-payments deficitsb)Balance-of-payments surplusesc)Current Account deficitsd)Capital Account deficitsAnswer: c32More important than he absolute size of a country’s balance-of-payments disequilibriuma)is the nature and cause of the disequilibriumb)is whether it is a trade surplus or deficitc)is whether the local government is mercantilist or notd)Nothing is more important than he absolute size of a country’sbalance-of-payments disequilibriumAnswer: aThe Relationship between Balance of Payments and National Income Accounting For questions in this section, the notation isY = GNP = national incomeC = consumptionI = private investmentG = government spendingX = exportsM = imports33National income, or Gross National Product is given by:a)GNP = Y = C + I + G + X + Mb)GNP = Y = C + I + G + X – Mc)GNP = I = C + Y + G + X – Md)GNP = Y = C + I + X + M – GAnswer: b)34Which of the following is a true statement?a)BCA ≡ X – Mb)BKA ≡ X – Mc)BKA –BCA ≡ X – Md)BKA ≡ X – MAnswer a)35There is an intimate relationship between a country’s BCA and how the country finances its domestic investment and pays for government expenditures. Thisrelationship is given by BCA ≡ X –M ≡ (S – I) + (T – G). Given this, which of thefollowing is a true statement?a)If (S –I) < 0, it implies that a country’s domestic savings is insufficient tofinance domestic investment.b)If (T –G) < 0, it implies that a country’s tax revenue is insufficient to financegovernment spendingc)both a) and b) are trued)none of the aboveAnswer c)36There is an intimate relationship between a country’s BCA and how the country finances its domestic investment and pays for government expenditures. Thisrelationship is given by BCA ≡ X –M ≡ (S – I) + (T – G). Given this, which of thefollowing is a true statement?a)If (S –I) < 0, it implies that a country’s domestic savings is insufficient tofinance domestic investment.b)If (T – G) < 0, it implies that a country’s tax revenue is insufficient to financegovernment spendingc)when BCA is negative, it implies that government budget deficits an/or part ofdomestic investment are being finance with foreign-controlled capitald)all of the above are trueAnswer d)37There is an intimate relationship between a country’s BCA and how the country finances its domestic investment and pays for government expenditures. Thisrelationship is given by BCA ≡ X –M ≡ (S – I) + (T – G). Given this, in order for acountry to reduce a BCA deficit, which of the following must occur?a)For a given level of S and I, the government budget deficit (T – G) must bereducedb)For a given level of I and (T – G), S must be increasedc)For a given level of S and (T – G), I must falld)All of the above would work to reduce a BCA deficitAnswer 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 Japanese insurance company purchases U.S. Treasury bonds and pays out of itsbank account kept in New York City.(2) A U.S. citizen consumes a meal at a restaurant in Paris and pays with her AmericanExpress card.(3) A Indian immigrant living in Los Angeles sends a check drawn on his L.A. bankaccount 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 fromthe U.S. bank account maintained by the British company.In contrast to the U.S., Japan has realized continuous current account surpluses. Whatcould be the main causes for these surpluses? Is it desirable to have continuous current account surpluses?。
国际金融(英文版第二版)Chapter 2 Theories of Balance of Payment
Transforming equation (2.2) into difference form yields:
dCA=dY-dA (2.3)
Thus the change in total absorption, dA, is given by:
dA=adY+dAd (2.4)
Chapter 2 Theories of bala
2.1 The elasticity approach to the balance of payments
This
approach provides an analysis of what happens to the current account balance when the country devalues its currency. The central message of the elasticity approach is that there are two direct effects of a devaluation on the current balance.
Taking the equation for national income:
Y=C+I+G+X-M (2.1)
2.2 The absorption approach to the balance of payments And defining domestic absorption as A=C+I+G, then we can get:
Figure 2.2 The money supply and reserves
Monetarists observe that the overall balance of payments can be thought of as consisting of the current account balance, the capital account balance, and change in the authorities’ reserves. That is: BP=CA+K=dR=0 So that:
国际金融英文版习题
Chapter1 balance of paymentsBalance of Payments Accounting1Balance of paymentsa)is defined as the statistical record of a country’sinternational transactions over a certain period of timepresented in the form of a double-entry bookkeepingb)provides detailed information concerning the demand and supplyof a country’s currencyc)can be used to evaluate the performance of a country ininternational economic competitiond)all of the aboveAnswer: d2Generally speaking, any transaction that results in a receipt from foreignersa)Will be recorded as a debit, with a negative sign, in the U.S.balance of paymentsb)Will be recorded as a debit, with a positive sign, in the U.S.balance of paymentsc)Will be recorded as a credit, with a negative sign, in the U.S.balance of paymentsd)Will be recorded as a credit, with a positive sign, in the U.S.balance of paymentsAnswer d3 Generally speaking, any transaction that results in a payment to foreignerse)Will be recorded as a debit, with a negative sign, in the U.S.balance of paymentsf)Will be recorded as a debit, with a positive sign, in the U.S.balance of paymentsg)Will be recorded as a credit, with a negative sign, in the U.S.balance of paymentsh)Will be recorded as a credit, with a positive sign, in the U.S.balance of paymentsAnswer a)4 Suppose the McDonalds Corporation imports 100 tons of Canadian beef, paying for it by transferring the funds to a New York bank account kept by the Canadian Beef Conglomerate.i)Payment by McDonalds will be recorded as a debitj)The deposit of the funds by the seller will be recorded as a debit k)Payment by McDonalds will be recorded as a creditl)The deposit of the funds by the buyer will be creditAnswer: a5Since the balance of payments is presented as a system of double-entry bookkeeping,a)Every credit in the account is balanced by a matching debitb)Every debit in the account is balanced by a matching creditc)a) and b) are both trued)None of the aboveAnswer c)6 A country’s international transactions can be grouped into thefollowing three main types:a)current account, medium term account, and long term capitalaccountb)current account, long term capital account, and officialreserve accountc)current account, capital account, and official reserveaccountd)capital account, official reserve account, trade account Answer: c7Invisible trade refers to:a)services that avoid tax paymentsb)underground economyc)legal, consulting, and engineering servicesd)tourist expenditures, onlyAnswer: c8The current account is divided into four finer categories:a)Merchandise trade, services, income, and statisticaldiscrepancy.b)Merchandise trade, services, income, and unilateraltransfersc)Merchandise trade, services, portfolio investment, andunilateral transfersd)Merchandise trade, services, factor income, and directinvestmentAnswer: b9Factor incomea)Consists largely of interest, dividends, and other income onforeign investments.b)Is a theoretical construct of the factors of production, land,labor, capital, and entrepreneurial ability.c)Is generally a very minor part of national income accounting,smaller than the statistical discrepancy.d)None of the aboveAnswer: aUSE THE FOLLOWING INFORMATION TO ANSWER THE NEXT TWO QUESTIONS10 The entries in the “current account” and the “capital account”, combined together, can be outlined (in alphabetic order) as:(i)- direct investment(ii)- factor income (v)- other capital (vi)- portfolio investment(iii)- merchandise (iv)- official transfer (vii)- private transfer(viii)- services11Current account includesa)(i), (ii), and (iii)b)(ii), (iii), and (vii)c)(iv), (v), and (vii)d)(i), (v), and (vi)Answer: b12Capital account includesa)(i), (ii), and (iii)b)(ii), (iii), and (vii)c)(iv), (v), and (vii)d)(i), (v), and (vi)Answer: d13The difference between Foreign Direct Investment and Portfolio Investment is that:a)Portfolio Investment mostly represents the sale and purchase offoreign financial assets such as stocks and bonds that do not involve a transfer of control.b)Foreign Direct Investment mostly represents the sale and purchaseof foreign financial assets such as stocks whereas PortfolioInvestment mostly involves the sales and purchase of foreignbonds.c)Foreign direct investment is about buying land and buildingfactories, whereas portfolio investment is about buying stocks and bonds.d)All of the aboveAnswer: a14In the latter half of the 1980s, with a strong yen, Japanese firmsa)Faced difficulty exportingb)Could better afford to acquire U.S. assets that had become lessexpensive in terms of yen.c)Financed a sharp increase in Japanese FDI in the United Statesd)All of the aboveAnswer: d15International portfolio investments have boomed in recent years, asa result ofa)A depreciating U.S. dollarb)Increased gasoline and other commodity prices.c)The general relaxation of capital controls and regulation in manycountriesd)None of the aboveAnswer: cAnswer: c)16The capital account measuresa)The sum of U.S. sales of assets to foreigners and U.S. purchasesof foreign assets.b)The difference between U.S. sales of assets to foreigners and U.S.purchases of foreign assets.c)The difference between U.S. sales of manufactured goods toforeigners and U.S. purchases of foreign products.d)None of the aboveAnswer: b) page 6417When Honda, a Japanese auto maker, built a factory in Ohio,a)It was engaged in foreign direct investmentb)It was engaged in portfolio investmentc)It was engaged in a cross-border acquisitiond)None of the above.Answer: a) page 64.18The capital account may be divided into three categories:a)Cross-border mergers and acquisitions, portfolio investment, andother investmentb)Direct investment, portfolio investment, and Cross-bordermergers and acquisitionsc)Direct investment, mergers and acquisitions, and otherinvestmentd)Direct investment, portfolio investment, and other investment Answer: d)19When Nestlé, a Swiss firm, bought the American firm Carnation, it was engaged in foreign direct investment. If Nestlé had only boughta non-controlling number of shares of the firma)Nestlé would have been engaged in portfolio investmentb)Nestlé wo uld have been engaged in a cross-border acquisitionc)It would depend if they bought the shares from an American or aCanadiand)None of the above.Answer: a)20Foreign direct investment (FDI) occursa)when an investor acquires a measure of control of a foreignbusinessb)when there is an acquisition, by a foreign entity in the U.S.,of 10 percent or more of the voting shares of a businessc)with sales and purchases of foreign stocks and bonds that do notinvolve a transfer of controld)a and bAnswer: d21Statistical discrepancy, which by definition represents errors and omissionsa)Cannot be calculated directlyb)Is calculated by taking into account the balance-of-paymentsidentityc)Probably has some elements that are honest mistakes, it can’tall be money laundering and drugs.d)All of the aboveAnswer: d)22The statistical discrepancy in the balance-of-payments accountsa)Arise since recordings of payments and receipts are done atdifferent times, in different places, possibly using different methods.b)Arise since some transactions (illegal transactions?) occur“off the books”.c)Represents omitted and misrecorded transactions.d)All of the aboveAnswer: d)23Regarding the statistical discrepancy in the balance-of-payments accountsa)There is some evidence that financial transactions may be mainlyresponsible for the discrepancy.b)The sum of the balance on the capital account and the statisticaldiscrepancy is very close to the balance of the current account in magnitude.c)It tends to be positive one year and negative in others, so it’ssafe to ignore itd)a) and b)Answer: d)24When a country must make a net payment to foreigners because of a balance-of-payments deficit, the central bank of the countrya)Should do nothingb)Should run down its official reserve assets (e.g. gold, foreignexchanges, and SDRs)c)Should borrow anew from foreign central banks.d)b) or c) will workAnswer: d)25Continued U.S. trade deficits coupled with foreigners’ desire to diversify their currency holdings away from U.S. dollarsa)could further diminish the position of the dollar as the dominantreserve currencyb)could affect the value of U.S. dollar (e.g. through the currencydiversification decisions of Asian central banks)c)Could lend steam to the emergence of the euro as a credible reservecurrencyd)All of the aboveAnswer: d26Currently, international reserve assets are comprised ofa)gold, platinum, foreign exchanges, and special drawing rights(SDRs)b)gold, foreign exchanges, special drawing rights (SDRs), andreserve positions in the International Monetary Fund (IMF)c)gold, diamonds, foreign exchanges, and special drawing rights(SDRs)d)reserve positions in the International Monetary Fund (IMF), only Answer: b27International reserve assets include “foreign exchanges”. These area)Special Drawing Rights (SDRs) at the IMFb)reserve positions in the International Monetary Fund (IMF)c)Foreign currency held by a country’s central bankd)None of the aboveAnswer: c28The most important international reserve asset, comprising 94 percent of the total reserve assets held by IMF member countries isa)Goldb)Foreign exchangesc)Special Drawing Rights (SDRs)d)Reserve positions in the International Monetary Fund (IMF) Answer: b29The vast majority of the foreign-exchange reserves held by central banks are denominated ina)Local currenciesb)U.S. dollarsc)Yend)EuroAnswer: b30The U.S. Trade Deficita)Is a capital account surplusb)Is a current account deficitc)Is both a capital account surplus and a current account deficitd)None of the aboveAnswer: c31Over the last several years the U.S. has run persistenta)Balance-of-payments deficitsb)Balance-of-payments surplusesc)Current Account deficitsd)Capital Account deficitsAnswer: c32More important than he absolute size of a country’s balance-of-payments disequilibriuma)is the nature and cause of the disequilibriumb)is whether it is a trade surplus or deficitc)is whether the local government is mercantilist or notd)Nothing is more important than he absolute size of a country’sbalance-of-payments disequilibriumAnswer: aThe Relationship between Balance of Payments and National Income Accounting For questions in this section, the notation isY = GNP = national incomeC = consumptionI = private investmentG = government spendingX = exportsM = imports33National income, or Gross National Product is given by:a)GNP = Y = C + I + G + X + Mb)GNP = Y = C + I + G + X – Mc)GNP = I = C + Y + G + X – Md)GNP = Y = C + I + X + M – GAnswer: b)34Which of the following is a true statement?a)BCA ≡ X – Mb)BKA ≡ X – Mc)BKA –BCA ≡ X – Md)BKA ≡ X – MAnswer a)35There is an intimate relationship betwe en a country’s BCA and how the country finances its domestic investment and pays for governmentexpenditures. This relationship is given by BCA ≡ X –M ≡ (S –I) + (T –G). Given this, which of the following is a true statement?a)If (S – I) < 0, it implies that a country’s domestic savingsis insufficient to finance domestic investment.b) If (T –G) < 0, it implies that a country’s tax revenue isinsufficient to finance government spendingc)both a) and b) are trued)none of the aboveAnswer c)36There is an intim ate 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, which of the following is a true statement?a)If (S –I) < 0, it implies that a country’s domestic savingsis insufficient to finance domestic investment.b) If (T –G) < 0, it implies that a country’s tax revenue isinsufficient to finance government spendingc)when BCA is negative, it implies that government budget deficitsan/or part of domestic investment are being finance withforeign-controlled capitald)all of the above are trueAnswer d)37There is an intimate relationship between a country’s BCA and how the country finances its domestic investment and pays for governmentexpenditures. This relationship is given by BCA ≡ X –M ≡ (S –I) + (T – G). Given this, in order for a country to reduce a BCAdeficit, which of the following must occur?a)For a given level of S and I, the government budget deficit (T– G) must be reducedb)For a given level of I and (T – G), S must be increasedc)For a given level of S and (T – G), I must falld)All of the above would work to reduce a BCA deficitAnswer 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 Japanese insurance company purchases U.S. Treasury bonds and paysout of its bank account kept in New York City.(2) A U.S. citizen consumes a meal at a restaurant in Paris and payswith her American Express card.(3) A Indian immigrant living in Los Angeles sends a check drawn onhis 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 andgets paid from the U.S. bank account maintained by the British company.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?。
国际金融英文版ChapterTwo
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国际金融英文版ChapterTwo
重要说明
偏差
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国际金融英文版ChapterTwo
此研究方法给我们的启发
³ 我国能源的短缺
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国际金融英文版ChapterTwo
结束句
谢谢
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国际金融英文版ChapterTwo
Fundamentals of BOP Accounting
New York bank deposits.
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国际金融英文版ChapterTwo
Fundamentals of BOP Accounting
3. How do we record transactions between residents and nonresidents
A set of accounts(p14-18)
³ Each transaction, involves two opposite flows of equal value. ³ For example: ³ The U.S. government sells $29 million worth of wheat to Russia, being paid
Debit: unilateral transfer $8 million
Credit: goods
$8 million
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国际金融英文版ChapterTwo
Account name
Debit
Current account
67
Goods
34(2)
Services
Income
25(4)
•Financia l account
国际金融Chapter Two
• A debit (-) is a flow for which the country must pay. Such as : • The country’s imports of goods; • Purchases by firms in this country of consulting services from providers located in foreign countries; • Purchases by investors in this country of the equity shares of a foreign company from the foreigner that previously owned the shares. • In each of these cases is obligated to make a payment to a foreigner.
The U.S. government simply gives $8 million in foreign aid to the government of Egypt in the form of wheat from U.S. government stockpiles.
• Credit(+) Debit(-) • Merchandise export $8 • Unilateral transfer to Egypt $8
• The $ 8 million credit is straightforward since this is just another merchandise export, for which the United States must be paid. • The accountants get around the fact that the United States was not paid by Egypt by inventing a debit item for the unilateral transfer (gift) to Egypt. They invent the fiction that the United States received $ 8 million in goodwill- or gratitude- from Egypt for its gift of wheat.