International Economics: Balance of Payments - Question Bank

Question Bank ''International Economics: Balance of Payments'' with interactive revision questions on a variety of economics topics.

Question Bank - Economics

International Economics: Balance of Payments

Q1. The J-curve effect refers to the observation that

(Select one answer)

(a) * GDP usually decreases before it increases after a currency depreciation.
(b) * GDP usually decreases before it increases after a currency appreciation.
(c) * the trade balance usually gets worse before it improves after a currency appreciation.
(d) * the trade balance usually gets worse before it improves after a currency depreciation.


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Q2. Suppose that a Brazilian firm imports Japanese microchips. The transaction will appear

(Select one answer)

(a) * on neither country's balance of payment accounts
(b) * as a debit on the Brazilian balance of payments
(c) * as a debit on the Japanese balance of payments
(d) * as a credit on the Brazilian balance of payments


Source: McGraw Hill logo


Q3. The record of a country's transactions in goods, services, and assets with the rest of the world is its

(Select one answer)

(a) * current account.
(b) * balance of trade.
(c) * capital account.
(d) * balance of payments.


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Q4. If there is a short-term capital outflow out of the U.S. and into Japan, the outflow will appear as

(Select one answer)

(a) * a debit on the U.S. current account
(b) * a debit on the U.S. capital account
(c) * a credit on the U.S. capital account
(d) * a credit on the U.S. current account


Source: McGraw Hill logo


Q5. A current account deficit implies that

(Select one answer)

(a) * spending exceeds income
(b) * income exceeds spending
(c) * exports exceeds imports
(d) * none of the above


Source: McGraw Hill logo


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