ECN441 Test Questions and Correct Solutions Rated A+

In 2011 the US had approximately _____% of the world's population and made approximately ______% of the world's Gross National Product: a) 5 and 10 b) 1 and 50 c) 20 and 40 d) 5 and 28 e) 20 and 20 - d Gross National Product (GNP) per capita is defined as the country's GNP divided by its: a) area of land in square miles b) total working population c) number of capitalists d) total population e) real disposable income per hectac - d The wealth of a nation is defined in terms of: a) manufactured, or physical capital (e.g. machinery, building, etc), b) natural capital (e.g. forests, fossil fuels, minerals, etc), c) human capital (i.e. education and skills of the population), d) all of (a) through (c) above, e) total money supply (i.e. M3). - d 4. The index of openness of an economy is usually defined as: a) either the value of exports, or the value of imports, or the value of the sum of imports and exports; in all cases expressed as a percentage of GNP b) the sum of the budget deficit and the trade deficit c) the sum of the budget deficit and the trade deficit expressed as a percentage of GNP d) the value of domestic stocks owned by foreigners e) none of the above - a The Bretton Woods Conference at New Hampshire in 1944, a) established the International Monetary Fund (IMF) and established a system of floating exchange 2 rates b) established a formal system of tariffs, quotas and actively encouraged a new world era of protectionism c) sought to promote a new world order of increased international trade and worldwide economic growth through a system of freely floating exchange rates. d) established the International Monetary Fund (IMF) and established a system of adjustable peg, fixed exchange rates - d Which of the following would call for inpayments to the US? a) American imports of German steel b) American unilateral transfers to less developed countries c) American firms selling insurance to British shipping companies d) American tourists staying in a hotel in Mexico. e) none of the above - C The US balance of trade is determined by: a) exchange rates b) growth of economies overseas c) relative prices in world markets d) levels of tariffs and quotas e) all of the above - e The following statistical Balance of Payments data is available for the fictitious economy of Internationale in billions of $ and is relevant for questions (8) through (3): Merchandise exports 700 Merchandise imports -650 Interest and dividend received 80 Interest and dividend paid out -120 Miscellaneous services exported 250 Miscellaneous services imported -320 Net unilateral transfers 30 Net change in foreign assets held by residents of Internationale 360 Net change of Internationale assets held by foreigners -340 The Balance of Goods in Internationale in billions of $ is: a) -650 b) 35 c) 50 d) -210 e) 180 - c Merchandise exports 700 Merchandise imports -650 Interest and dividend received 80 Interest and dividend paid out -120 Miscellaneous services exported 250 Miscellaneous services imported -320 Net unilateral transfers 30 Net change in foreign assets held by residents of Internationale 360 Net change of Internationale assets held by foreigners -340 The Current Account Balance in Internationale in billions of $ is: a) 50 b) -30 c) 1060 d) 900 e) 0 - b Merchandise exports 700 Merchandise imports -650 Interest and dividend received 80 Interest and dividend paid out -120 Miscellaneous services exported 250 Miscellaneous services imported -320 Net unilateral transfers 30 Net change in foreign assets held by residents of Internationale 360 Net change of Internationale assets held by foreigners -340 The Statistical Discrepancy in Internationale in billions of $ is: a) 10 b) 30 c) 440 d) 20 e) 0 - a