Macro Made Simple
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Unit 6 · Open Economy — International Trade and Finance

Unit 6 Practice

Do this after the Unit 6 learning page. Work the five topic quizzes first — each question explains itself the moment you answer. Then write both free-response questions against the real rubric, and finish with the 60-point full-length test.

Topic Quiz 1: Balance of Payments Accounts

10 questions · explanations appear as you answer

Answered 0/10

  1. 1.The Balance of Payments is made up of which two main accounts?
  2. 2.The key balance of payments identity is:
  3. 3.Which of the following is NOT one of the three components of the Current Account?
  4. 4.A US company exports machinery to Germany. In the US Balance of Payments, this transaction is recorded as a:
  5. 5.A US consumer purchases a car imported from Japan. In the US Balance of Payments, this transaction is recorded as a:
  6. 6.A country's exports total $500 billion, imports total $420 billion, net income from abroad is +$10 billion, and net unilateral transfers are −$15 billion. What is the Current Account balance?
  7. 7.Using the Current Account balance from the previous question ($75 billion surplus), what must the Capital and Financial Account balance be?
  8. 8.When a Japanese investor buys stock issued by a US company, this transaction is recorded in the US Balance of Payments as a credit in the:
  9. 9.If a country's Current Account has a deficit, what must be true of its Capital and Financial Account?
  10. 10.A US resident sends $2,000 to family living abroad as a gift. This transaction is recorded in the US Balance of Payments as a: