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EC580 FINAL EXAM 2024/2025 WITH 100% ACCURATE SOLUTIONS
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EC580 FINAL EXAM 2024/2025 WITH 100% ACCURATE SOLUTIONS
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EC580 FINAL EXAM 2024/2025 WITH100% ACCURATE SOLUTIONS
Based on the following information, the balance on the current account
is
Exports of goods and services 1000
Imports of goods and services 800
Unilateral transfers received 100
Unilateral transfers paid to foreigners 200
Investment income paid to foreigners 300
Investment income received from foreigners 400
Select one:
a. +100
b. +200
c. 0
d. -100
e. -200 - Precise Answer ✔✔b. +200
If the residents of a country receive income from their foreign
investments, it is counted as a
A. credit in the current account.
B. debit in the current account.
C. credit in the capital account.
,D. debit in the capital account.
E. debit in either the capital or current account, depending on the type of
investment income. - Precise Answer ✔✔A. credit in the current
account
If a nation's exports of goods and services are smaller than its imports of
goods and services,
Select one:
A. its trade balance will be in surplus.
B. its trade balance will be in deficit.
C. its trade in services must be greater than its trade in goods
D. trade is clearly not benefiting this nation. - Precise Answer ✔✔B. its
trade balance will be in deficit.
Which of the following is not an explanation for consistent deficits in
the US current account over the last twenty plus years?
Select one:
A. Rapid economic growth in the US increased incomes
B. US trading partners were experiencing rapid economic growth
C. Foreign demand for US exports grew less rapidly than US demand for
imports.
D. When national income rises, demand for imports rises as well. -
Precise Answer ✔✔B. US trading partners were experiencing rapid
economic growth
, The difference between GNP and GDP is
Select one:
A. GNP includes income received from abroad and excludes income
paid abroad.
B. GNP excludes income received from abroad and includes income
paid abroad.
C. GNP includes exports and imports.
D. GNP excludes exports and imports.
E. GNP includes capital flows received from abroad and excludes capital
flows to foreign countries. - Precise Answer ✔✔A. GNP includes
income received from abroad and excludes income paid abroad.
All of the following are true about foreign direct investment (FDI) and
portfolio investment except
Select one:
A. increases in the flow of portfolio investments increase the likelihood
of financial crisis.
B. both portfolio investments and FDI are the same in that they both
give their holders a claim on the future output of the foreign economy.
C. FDI is relatively illiquid compared to portfolio investment.
D. portfolio investments have been on the decline in recent years (or
decades). - Precise Answer ✔✔D. portfolio investments have been on
the decline in recent years (or decades).
Debt service
Select one:
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