Question 1

​Direct foreign investment into the United States represents a ____.

Accepted Answer

A)   ​capital inflow
B)   ​trade inflow
C)   ​capital outflow
D)   ​trade outflowE) B) and C)
F) A) and D)

Question 2

Which of the following is not a goal of the International Monetary Fund (IMF) ?

Accepted Answer

A)   To promote cooperation among countries on international monetary issues
B)   To promote stability in exchange rates
C)   To enhance a country's long-term economic growth via the extension of structural adjustment loans
D)   To promote free trade
E)   To promote free mobility of capital funds across countriesF) A) and D)
G) A) and C)

Question 3

​The International Development Association was established to promote economic development:

Accepted Answer

A)   ​in Asia through grants to businesses.
B)   ​by providing nonsubsidized loans (at market interest rates)  to governments and their agencies.
C)   ​by providing low-interest-rate loans (below-market rates)  to poor nations.
D)   ​through the private sector by providing loans to corporations and investing in their stock.E) B) and C)
F) C) and D)

Question 4

The United States typically has a balance-of-trade surplus in its trade with ____.

Accepted Answer

A)   China
B)   Japan
C)   China AND Japan
D)   None of these are correct.E) A) and D)
F) C) and D)

Question 5

Outsourcing allows some MNCs to reduce costs but shifts jobs to other countries.

Accepted Answer

A) True 
 B)False

Question 6

​The term "dumping" refers to the:

Accepted Answer

A)   ​exporting of goods that do not meet quality standards.
B)   ​sale of junk bonds to foreign countries.
C)   ​removal of foreign subsidiaries by the host government.
D)   ​exporting of goods at prices below cost.E) B) and C)
F) C) and D)

Question 7

​The direct foreign investment positions by U.S. firms have generally ____ over time. Restrictions by governments on direct foreign investment have generally ___ over time.

Accepted Answer

A)   ​increased; increased
B)   ​increased; decreased
C)   ​decreased; decreased
D)   ​decreased; increasedE) A) and B)
F) A) and C)

Question 8

A tariff is a maximum limit on imports.

Accepted Answer

A) True 
 B)False

Question 9

​The primary income component in a country's current account may reflect income received due to:

Accepted Answer

A)   ​grants.
B)   ​direct foreign investment.
C)   ​aid.
D)   ​gifts.E) A) and B)
F) B) and D)

Question 10

U.S. government officials would likely prefer that China devalue the yuan against the dollar.

Accepted Answer

A) True 
 B)False

Question 11

​A high home inflation rate relative to other countries would ____ the home country's current account balance, other things being equal. High growth in the home income level relative to other countries would ____ the home country's current account balance, other things being equal.

Accepted Answer

A)   ​increase; increase
B)   ​increase; decrease
C)   ​decrease; decrease
D)   ​decrease; increaseE) A) and D)
F) A) and C)

Question 12

The inception of the euro eliminated exchange rate risk on trade transactions between the U.S. and the eurozone.

Accepted Answer

A) True 
 B)False

Question 13

The J-curve effect is the initial worsening of the U.S. trade balance due to a weakening dollar because of established trade relationships that are not easily changed; as the dollar weakens, the dollar value of imports initially rises before the U.S. trade balance is improved.

Accepted Answer

A) True 
 B)False

Question 14

Outsourcing is the process of subcontracting to a third party in another country to provide supplies or services that were previously obtained internally.

Accepted Answer

A) True 
 B)False

Exam 2: International Flow of Funds

U.S. government officials would likely prefer that China devalue the yuan against the dollar.

Correct Answer
verified

The United States typically has a balance-of-trade surplus in its trade with ____.

Correct Answer
verified

Direct foreign investment into the United States represents a ____.

Correct Answer
verified

A high home inflation rate relative to other countries would the home country's current account balance, other things being equal. High growth in the home income level relative to other countries would the home country's current account balance, other things being equal.

Correct Answer
verified

The primary income component in a country's current account may reflect income received due to:

Correct Answer
verified

The inception of the euro eliminated exchange rate risk on trade transactions between the U.S. and the eurozone.

Correct Answer
verified

Outsourcing allows some MNCs to reduce costs but shifts jobs to other countries.

Correct Answer
verified

The International Development Association was established to promote economic development:

Correct Answer
verified

The direct foreign investment positions by U.S. firms have generally __ over time. Restrictions by governments on direct foreign investment have generally _ over time.

Correct Answer
verified

A tariff is a maximum limit on imports.

Correct Answer
verified

The term "dumping" refers to the:

Correct Answer
verified

Outsourcing is the process of subcontracting to a third party in another country to provide supplies or services that were previously obtained internally.

Correct Answer
verified

The J-curve effect is the initial worsening of the U.S. trade balance due to a weakening dollar because of established trade relationships that are not easily changed; as the dollar weakens, the dollar value of imports initially rises before the U.S. trade balance is improved.

Correct Answer
verified

Which of the following is not a goal of the International Monetary Fund (IMF) ?

Correct Answer
verified

Exam 2: International Flow of Funds

U.S. government officials would likely prefer that China devalue the yuan against the dollar.

Correct AnswerverifiedShow Answer

The United States typically has a balance-of-trade surplus in its trade with ____.

Correct AnswerverifiedShow Answer

​Direct foreign investment into the United States represents a ____.

Correct AnswerverifiedShow Answer

​A high home inflation rate relative to other countries would ____ the home country's current account balance, other things being equal. High growth in the home income level relative to other countries would ____ the home country's current account balance, other things being equal.

Correct AnswerverifiedShow Answer

​The primary income component in a country's current account may reflect income received due to:

Correct AnswerverifiedShow Answer

The inception of the euro eliminated exchange rate risk on trade transactions between the U.S. and the eurozone.

Correct AnswerverifiedShow Answer

Outsourcing allows some MNCs to reduce costs but shifts jobs to other countries.

Correct AnswerverifiedShow Answer

​The International Development Association was established to promote economic development:

Correct AnswerverifiedShow Answer

​The direct foreign investment positions by U.S. firms have generally ____ over time. Restrictions by governments on direct foreign investment have generally ___ over time.

Correct AnswerverifiedShow Answer

A tariff is a maximum limit on imports.

Correct AnswerverifiedShow Answer

​The term "dumping" refers to the:

Correct AnswerverifiedShow Answer

Outsourcing is the process of subcontracting to a third party in another country to provide supplies or services that were previously obtained internally.

Correct AnswerverifiedShow Answer

The J-curve effect is the initial worsening of the U.S. trade balance due to a weakening dollar because of established trade relationships that are not easily changed; as the dollar weakens, the dollar value of imports initially rises before the U.S. trade balance is improved.

Correct AnswerverifiedShow Answer

Which of the following is not a goal of the International Monetary Fund (IMF) ?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Direct foreign investment into the United States represents a ____.

Correct Answer
verified

A high home inflation rate relative to other countries would the home country's current account balance, other things being equal. High growth in the home income level relative to other countries would the home country's current account balance, other things being equal.

Correct Answer
verified

The primary income component in a country's current account may reflect income received due to:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The International Development Association was established to promote economic development:

Correct Answer
verified

The direct foreign investment positions by U.S. firms have generally __ over time. Restrictions by governments on direct foreign investment have generally _ over time.

Correct Answer
verified

Correct Answer
verified

The term "dumping" refers to the:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified