Question 1

If a country has a capital account deficit, that country's stock of international indebtedness is

Accepted Answer

The answer of If a country has a capital account...

Question 2

A creditor nation means a nation

Accepted Answer

A creditor nation is one that has historically invested more in other countries than it has received in investments from them, resulting in a net positive international investment position.

Question 3

If a country during its entire history has invested more in the rest of the world than the rest of the world has invested in it, the country is a

Accepted Answer

A country that has invested more in the rest of the world than the rest of the world has invested in it is known as a creditor nation. This means that the country has a surplus of financial assets and is a net lender to other countries. In contrast, a debtor nation has borrowed more from the rest of the world than it has invested abroad and owes more in liabilities than it holds in assets.

Question 4

Today, the United States is a
I. net borrower
II. net lender
III. debtor nation
IV. creditor nation

Accepted Answer

The United States is currently a net borrower, meaning the country as a whole is borrowing more funds from overseas than it's lending out. This results in the United States being a debtor nation, meaning the country owes more to other countries than it's owed.

Question 5

A creditor nation is a country that and a debtor nation is a country that .

Accepted Answer

A creditor nation is a country that has invested more in the rest of the world than other countries have invested in it. This means that over time, the country has accumulated assets and investments overseas. Conversely, a debtor nation is a country that has borrowed more than it has lent, meaning that it owes more money to other countries and entities than it is owed.

Question 6

Since the mid 1980s, the United States has been a net and a nation.

Accepted Answer

Being a net borrower means that the country is borrowing more money from foreign countries than it is lending to them. Being a debtor nation means that the country's total debt owed to foreign countries is greater than the total debt owed to it by foreign countries. These two terms accurately describe the situation of the United States since the mid 1980s, as it has had a trade deficit and a growing national debt.

Question 7

Which of the following countries are net lenders?
I. Japan
II. United States

Accepted Answer

Japan is known as a net lender because it has consistently run a current account surplus, meaning it lends more to the rest of the world than it borrows. The United States, on the other hand, is a net borrower, with a long-standing current account deficit.

Question 8

If a country lends more to foreign countries than it borrows from foreign countries in a year, then definitely that year

Accepted Answer

When a country lends more to foreign countries than it borrows, it is a net lender, indicating it has a surplus in its financial account.

Question 9

If a country has a capital account surplus, that country's stock of international indebtedness is

Accepted Answer

A capital account surplus indicates that a country is receiving more capital inflows than outflows, leading to an increase in its international indebtedness.

Question 10

Suppose this year Angola borrows $100 million from foreign countries while it lends $15 million. Angola definitely is a

Accepted Answer

Angola is a net borrower because it borrowed more ($100 million) than it lent ($15 million), resulting in a net borrowing position.

Question 11

A net borrower is a country that , while a net lender is a country that _ _.

Accepted Answer

A net borrower is a country that borrows more than it lends, while a net lender is a country that lends more than it borrows.

Question 12

Suppose Italy lends 1.5 billion euros in 2007 while it borrowed 1 billion euros. Italy definitely is a

Accepted Answer

Italy lent more than it borrowed, so it is a net lender.

Question 13

A developing county is usually a
I. net lender.
II. net borrower.
III. debtor nation.
IV. creditor nation.

Accepted Answer

Developing countries are typically net borrowers and debtor nations because they often need to borrow from other countries or international organizations to finance their development projects and economic growth.

Question 14

Over its history, Spain has loaned more money abroad than foreigners have lent to it. Spain is a

Accepted Answer

The answer of Over its history, Spain has loaned more...

Question 15

A country that borrows more from the rest of the world than it lends to it in a year is called a
, and a country that lends more to the rest of the world than it borrows from it in a year is called a .

Accepted Answer

A country that borrows more than it lends is a net borrower, while a country that lends more than it borrows is a net lender. This is because the difference between what a country borrows and what it lends is its net borrowing or net lending position. Option B is incorrect because it does not specify whether the country is a net borrower or net lender. Option C is incorrect because it refers to trade rather than borrowing and lending. Option D is incorrect because it uses the term "gross" which is not necessary when referring to net borrowing and lending.

Question 16

A country that during its entire history has borrowed more from the rest of the world than it has lent to it is a , and a country that during its entire history has invested more in the rest of the world than other countries have invested in it is a _.

Accepted Answer

A country that has borrowed more than it has lent is a "debtor nation," while a country that has invested more than it has received is a "creditor nation."

Question 17

If a country is currently borrowing more from the rest of the world than it is lending to the rest of the world, the country is a

Accepted Answer

If a country is currently borrowing more from the rest of the world than it is lending to the rest of the world, the country is a net borrower.

Question 18

Over its history, Brazil has borrowed more from the rest of the world than it has loaned to the rest of the world. Brazil

Accepted Answer

Brazil has borrowed more than it has loaned, which means it has a negative net international investment position and is therefore a debtor nation.

Question 19

A debtor nation means a nation

Accepted Answer

A debtor nation is one that has historically received more investment from other countries than it has invested in them.

Question 20

This year a country loaned more to the rest of the world than it borrowed from the rest of the world. In addition, the country has invested more in the rest of the world than other countries have invested in it. The country is currently a and also a .

Accepted Answer

The country loaned more to the rest of the world than it borrowed, indicating that it is a net lender. It also invested more in the rest of the world than other countries invested in it, indicating that it is a creditor nation. Therefore, the correct choice is C) net lender; creditor nation.

Quiz 9: The Exchange Rate and the Balance of Payments