problem 1: The most usually traded currency in the foreign exchange market is:
a) British pound.
b) Japanese yen.
c) Chinese Yuan.
d) U.S. dollar.
problem 2: The euro is now the official currency of all of the given countries except:
c) Great Britain.
problem 3: The balance of trade deficit takes place when a country:
a) Exports more goods than it imports.
b) Buys more goods from the rest of the world than it sells.
c) Buys more stocks and bonds from the rest of the world than it sells.
d) Both (b) and (c).
problem 4: Which of the given transactions is a debit in the current account?
a) Export of merchandise
b) Export of services
c) Gift to foreigners
d) Foreign bond purchase
problem 5: Is it essential to "balance" the BOP statement.
a) Reserve inflow
b) Statistical discrepancy
c) Debit transaction
d) Credit transaction
problem 6: In the BOP, travel and tourism are comprised in the category of:
a) Unilateral transfers.
b) Financial account.
c) Merchandise account.
d) Services account.
problem 7: Interest earned on foreign holdings of U.S. federal, state and local government debt is recorded in:
a) Services account.
b) Merchandise account.
c) Transfers account.
d) Financial account.
problem 8: A current account surplus implies that:
a) Country is a net lender with the rest of the world.
b) Country is running a net capital account surplus.
c) Foreign investment in domestic securities is at very low levels.
d) All of the above.