Question 1

An American buys a Japanese car, paying by writing a check on an account with a bank in New York. How would this be accounted for in the balance of payments?

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Question 2

The profits of a Spanish factory with British owners are

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Question 3

What is the national income identity for a closed economy?

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Question 4

The position of the United States current account balance in 2015 was

Accepted Answer

A current account deficit means that a country is importing more goods and services than it is exporting, and therefore it is borrowing money from other countries to finance its consumption. According to the information provided, the United States borrowed roughly 3 percent of its GNP in 2015, leading to a large current account deficit.

Question 5

What is the national income identity for an open economy?

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Question 6

You travel to Paris and pay for a $100 dinner with your credit card. How is this accounted for in the balance of payments?

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Question 7

Assume in a closed economy:
C = 50 + 0.6 (Y - T)
G = 15
I = 15
T = 2
(a) Calculate Y at equilibrium
(b) Calculate C
(c) Assume the economy is open
EX = 4 + 3EP  /P
IM = 8 + 0.1 (Y - T) - 2EP  /P
E = 3
P  = 1
P = 1.5
Find equilibrium Y.

Accepted Answer

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C = 50...

Question 8

Assume in a closed economy:
C = 40 + 0.8(Y - T)
G = 10
I = 20
T = 0, where T are taxes.
(a) Calculate Y at equilibrium.
(b) Calculate C, I, and G at equilibrium.
(c) Now assume the economy is open with exports and imports activities,
EX = 5 + 4EP  /P
IM = 10 + 0.1 (Y - T) - 3EP  /P
E = 3
P  = 1.5
P = 2
Find equilibrium Y.

Accepted Answer

The answer of Assume in a closed economy:
C = 40...

Question 9

Which one of the following statements is FALSE?

Accepted Answer

The statement that U.S. foreign debt was paid off in the 1990s and allowed the U.S. to attain a current account surplus is false. The U.S. has not had a current account surplus since the early 1990s and the foreign debt has continued to grow since then.

Question 10

Fill in the following table.

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Question 11

Discuss the values of private saving in closed and open economies.

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Question 12

A U.S. citizen buys a newly issued share of stock in England, paying for his order with a check, which the British company deposits in its own U.S. bank account in New York. How is this transaction accounted for in the balance of payments?

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Question 13

Fill in the following table.

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Question 14

The services British capital provides in Spain are a service export from Britain

Accepted Answer

Service exports are added to the GDP of the exporting country (in this case, Britain) when calculating the Gross National Product (GNP) of that country. Therefore, British capital services provided in Spain are added to British GDP in calculating British GNP.

Question 15

The official settlements balance or balance of payments is the sum of

Accepted Answer

The official settlements balance, or balance of payments, includes the current account balance and the capital account balance, but it subtracts the non-reserve portion of the financial account balance. This is because the official settlements balance aims to capture only those transactions that affect a country's official reserves.

Question 16

Fill in the following table.

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Question 17

The German government carries out an official foreign exchange intervention in which it uses dollars held in an American bank to buy French currency from its citizens. How is this accounted for in the balance of payments?

Accepted Answer

An official foreign exchange intervention falls under the financial account category of the balance of payments as it involves the buying and selling of foreign assets. In this case, the German government is selling their American dollar assets to buy French currency from French citizens. Therefore, the transaction counts as a French asset export in the financial account of Germany's balance of payments.

Question 18

The United States issues a $10,000 debt forgiveness to Argentina. How is this accounted for in the balance of payments?

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Question 19

Every international transaction automatically enters the balance of payments

Accepted Answer

Every international transaction involves both a credit and a debit entry in the balance of payments. The credit entry represents the receipt of a payment, such as from the export of goods or services, while the debit entry represents the payment made for an imported good or service. Therefore, each transaction is recorded twice, once as a credit and once as a debit.

Question 20

What can one learn from the following figure?

Accepted Answer

The answer of What can one learn from the following...

Quiz 13: National Income Accounting and the Balance of Payments

An American buys a Japanese car, paying by writing a check on an account with a bank in New York. How would this be accounted for in the balance of payments?

The profits of a Spanish factory with British owners are

What is the national income identity for a closed economy?

The position of the United States current account balance in 2015 was

What is the national income identity for an open economy?

You travel to Paris and pay for a $100 dinner with your credit card. How is this accounted for in the balance of payments?

Assume in a closed economy: C = 50 + 0.6 (Y - T) G = 15 I = 15 T = 2 (a) Calculate Y at equilibrium (b) Calculate C (c) Assume the economy is open EX = 4 + 3EP /P IM = 8 + 0.1 (Y - T) - 2EP /P E = 3 P = 1 P = 1.5 Find equilibrium Y.

Which one of the following statements is FALSE?

Fill in the following table.

Discuss the values of private saving in closed and open economies.

A U.S. citizen buys a newly issued share of stock in England, paying for his order with a check, which the British company deposits in its own U.S. bank account in New York. How is this transaction accounted for in the balance of payments?

Fill in the following table.

The services British capital provides in Spain are a service export from Britain

The official settlements balance or balance of payments is the sum of

Fill in the following table.

The German government carries out an official foreign exchange intervention in which it uses dollars held in an American bank to buy French currency from its citizens. How is this accounted for in the balance of payments?

The United States issues a $10,000 debt forgiveness to Argentina. How is this accounted for in the balance of payments?

Every international transaction automatically enters the balance of payments

What can one learn from the following figure?