国际金融英文版习题.docx

1、Chapter1 balance of payments Balance of Payments Accounting1 Balance of paymentsa) is defined as the statistical record of a countrys international transactions over a certain period of time presented in the form of a double-entry bookkeepingb) provides detailed information concerning the demand and

2、 supply of a countrys currencyc) can be used to evaluate the performance of a country in international economic competitiond) all of the aboveAnswer: d 2 Generally speaking, any transaction that results in a receipt from foreignersa) Will be recorded as a debit, with a negative sign, in the U.S. bal

3、ance of paymentsb) Will be recorded as a debit, with a positive sign, in the U.S. balance of paymentsc) Will be recorded as a credit, with a negative sign, in the U.S. balance of paymentsd) Will be recorded as a credit, with a positive sign, in the U.S. balance of paymentsAnswer d3 Generally speakin

4、g, any transaction that results in a payment to foreignerse) Will be recorded as a debit, with a negative sign, in the U.S. balance of paymentsf) Will be recorded as a debit, with a positive sign, in the U.S. balance of paymentsg) Will be recorded as a credit, with a negative sign, in the U.S. balan

5、ce of paymentsh) Will be recorded as a credit, with a positive sign, in the U.S. balance of paymentsAnswer a) 4 Suppose the McDonalds Corporation imports 100 tons of Canadian beef, paying for it by transferring the funds to a New York bank account kept by the Canadian Beef Conglomerate.i) Payment by

6、 McDonalds will be recorded as a debitj) The deposit of the funds by the seller will be recorded as a debitk) Payment by McDonalds will be recorded as a creditl) The deposit of the funds by the buyer will be creditAnswer: a 5 Since the balance of payments is presented as a system of double-entry boo

7、kkeeping,a) Every credit in the account is balanced by a matching debit b) Every debit in the account is balanced by a matching creditc) a) and b) are both trued) None of the aboveAnswer c)6 A countrys international transactions can be grouped into the following three main types:a) current account,

8、medium term account, and long term capital accountb) current account, long term capital account, and official reserve accountc) current account, capital account, and official reserve accountd) capital account, official reserve account, trade accountAnswer: c 7 Invisible trade refers to:a) services t

9、hat avoid tax paymentsb) underground economyc) legal, consulting, and engineering services d) tourist expenditures, onlyAnswer: c 8 The current account is divided into four finer categories:a) Merchandise trade, services, income, and statistical discrepancy.b) Merchandise trade, services, income, an

10、d unilateral transfersc) Merchandise trade, services, portfolio investment, and unilateral transfersd) Merchandise trade, services, factor income, and direct investmentAnswer: b 9 Factor incomea) Consists largely of interest, dividends, and other income on foreign investments.b) Is a theoretical con

11、struct of the factors of production, land, labor, capital, and entrepreneurial ability.c) Is generally a very minor part of national income accounting, smaller than the statistical discrepancy.d) None of the aboveAnswer: aUSE THE FOLLOWING INFORMATION TO ANSWER THE NEXT TWO QUESTIONS 10 The entries

12、in the “current account” and the “capital account”, combined together, can be outlined (in alphabetic order) as:(i)- direct investment(ii)- factor income(iii)- merchandise(iv)- official transfer(v)- other capital(vi)- portfolio investment(vii)- private transfer(viii)- services11 Current account incl

13、udesa) (i), (ii), and (iii)b) (ii), (iii), and (vii)c) (iv), (v), and (vii)d) (i), (v), and (vi)Answer: b 12 Capital account includesa) (i), (ii), and (iii)b) (ii), (iii), and (vii)c) (iv), (v), and (vii)d) (i), (v), and (vi)Answer: d 13 The difference between Foreign Direct Investment and Portfolio

14、 Investment is that:a) Portfolio Investment mostly represents the sale and purchase of foreign financial assets such as stocks and bonds that do not involve a transfer of control.b) Foreign Direct Investment mostly represents the sale and purchase of foreign financial assets such as stocks whereas P

15、ortfolio Investment mostly involves the sales and purchase of foreign bonds. c) Foreign direct investment is about buying land and building factories, whereas portfolio investment is about buying stocks and bonds.d) All of the aboveAnswer: a 14 In the latter half of the 1980s, with a strong yen, Jap

16、anese firmsa) Faced difficulty exportingb) Could better afford to acquire U.S. assets that had become less expensive in terms of yen.c) Financed a sharp increase in Japanese FDI in the United Statesd) All of the aboveAnswer: d 15 International portfolio investments have boomed in recent years, as a

17、result ofa) A depreciating U.S. dollarb) Increased gasoline and other commodity prices.c) The general relaxation of capital controls and regulation in many countriesd) None of the aboveAnswer: c Answer: c) 16 The capital account measuresa) The sum of U.S. sales of assets to foreigners and U.S. purch

18、ases of foreign assets.b) The difference between U.S. sales of assets to foreigners and U.S. purchases of foreign assets.c) The difference between U.S. sales of manufactured goods to foreigners and U.S. purchases of foreign products.d) None of the aboveAnswer: b) page 6417 When Honda, a Japanese aut

19、o maker, built a factory in Ohio, a) It was engaged in foreign direct investmentb) It was engaged in portfolio investmentc) It was engaged in a cross-border acquisitiond) None of the above.Answer: a) page 64.18 The capital account may be divided into three categories:a) Cross-border mergers and acqu

20、isitions, portfolio investment, and other investmentb) Direct investment, portfolio investment, and Cross-border mergers and acquisitionsc) Direct investment, mergers and acquisitions, and other investmentd) Direct investment, portfolio investment, and other investmentAnswer: d) 19 When Nestl, a Swi

21、ss firm, bought the American firm Carnation, it was engaged in foreign direct investment. If Nestl had only bought a non-controlling number of shares of the firma) Nestl would have been engaged in portfolio investmentb) Nestl would have been engaged in a cross-border acquisitionc) It would depend if

22、 they bought the shares from an American or a Canadiand) None of the above.Answer: a) 20 Foreign direct investment (FDI) occursa) when an investor acquires a measure of control of a foreign businessb) when there is an acquisition, by a foreign entity in the U.S., of 10 percent or more of the voting

23、shares of a businessc) with sales and purchases of foreign stocks and bonds that do not involve a transfer of controld) a and bAnswer: d 21 Statistical discrepancy, which by definition represents errors and omissions a) Cannot be calculated directlyb) Is calculated by taking into account the balance

24、-of-payments identity c) Probably has some elements that are honest mistakes, it cant all be money laundering and drugs.d) All of the aboveAnswer: d) 22 The statistical discrepancy in the balance-of-payments accountsa) Arise since recordings of payments and receipts are done at different times, in d

25、ifferent places, possibly using different methods.b) Arise since some transactions (illegal transactions?) occur “off the books”.c) Represents omitted and misrecorded transactions.d) All of the aboveAnswer: d) 23 Regarding the statistical discrepancy in the balance-of-payments accountsa) There is so

26、me evidence that financial transactions may be mainly responsible for the discrepancy.b) The sum of the balance on the capital account and the statistical discrepancy is very close to the balance of the current account in magnitude.c) It tends to be positive one year and negative in others, so its s

27、afe to ignore itd) a) and b)Answer: d) 24 When a country must make a net payment to foreigners because of a balance-of-payments deficit, the central bank of the country a) Should do nothingb) Should run down its official reserve assets (e.g. gold, foreign exchanges, and SDRs)c) Should borrow anew fr

28、om foreign central banks.d) b) or c) will workAnswer: d)25 Continued U.S. trade deficits coupled with foreigners desire to diversify their currency holdings away from U.S. dollarsa) could further diminish the position of the dollar as the dominant reserve currencyb) could affect the value of U.S. do

29、llar (e.g. through the currency diversification decisions of Asian central banks)c) Could lend steam to the emergence of the euro as a credible reserve currencyd) All of the aboveAnswer: d 26 Currently, international reserve assets are comprised ofa) gold, platinum, foreign exchanges, and special dr

30、awing rights (SDRs)b) gold, foreign exchanges, special drawing rights (SDRs), and reserve positions in the International Monetary Fund (IMF)c) gold, diamonds, foreign exchanges, and special drawing rights (SDRs)d) reserve positions in the International Monetary Fund (IMF), onlyAnswer: b 27 Internati

31、onal reserve assets include “foreign exchanges”. These area) Special Drawing Rights (SDRs) at the IMFb) reserve positions in the International Monetary Fund (IMF)c) Foreign currency held by a countrys central bankd) None of the aboveAnswer: c 28 The most important international reserve asset, compri

32、sing 94 percent of the total reserve assets held by IMF member countries isa) Goldb) Foreign exchangesc) Special Drawing Rights (SDRs)d) Reserve positions in the International Monetary Fund (IMF)Answer: b29 The vast majority of the foreign-exchange reserves held by central banks are denominated in a

33、) Local currenciesb) U.S. dollarsc) Yend) EuroAnswer: b 30 The U.S. Trade Deficita) Is a capital account surplusb) Is a current account deficitc) Is both a capital account surplus and a current account deficitd) None of the aboveAnswer: c31 Over the last several years the U.S. has run persistent a)

34、Balance-of-payments deficitsb) Balance-of-payments surplusesc) Current Account deficitsd) Capital Account deficitsAnswer: c32 More important than he absolute size of a countrys balance-of-payments disequilibriuma) is the nature and cause of the disequilibriumb) is whether it is a trade surplus or de

35、ficitc) is whether the local government is mercantilist or notd) Nothing is more important than he absolute size of a countrys balance-of-payments disequilibriumAnswer: aThe Relationship between Balance of Payments and National Income AccountingFor questions in this section, the notation is Y = GNP

36、= national incomeC = consumptionI = private investmentG = government spendingX = exportsM = imports33 National income, or Gross National Product is given by:a) GNP = Y = C + I + G + X + Mb) GNP = Y = C + I + G + X Mc) GNP = I = C + Y + G + X Md) GNP = Y = C + I + X + M GAnswer: b) 34 Which of the fo

37、llowing is a true statement?a) BCA X Mb) BKA X Mc) BKA BCA X Md) BKA X MAnswer a) 35 There is an intimate relationship between a countrys BCA and how the country finances its domestic investment and pays for government expenditures. This relationship is given by BCA X M (S I) + (T G). Given this, wh

38、ich of the following is a true statement?a) If (S I) 0, it implies that a countrys domestic savings is insufficient to finance domestic investment.b) If (T G) 0, it implies that a countrys tax revenue is insufficient to finance government spendingc) both a) and b) are trued) none of the aboveAnswer

39、c) 36 There is an intimate relationship between a countrys BCA and how the country finances its domestic investment and pays for government expenditures. This relationship is given by BCA X M (S I) + (T G). Given this, which of the following is a true statement?a) If (S I) 0, it implies that a count

40、rys domestic savings is insufficient to finance domestic investment.b) If (T G) 0, it implies that a countrys tax revenue is insufficient to finance government spendingc) when BCA is negative, it implies that government budget deficits an/or part of domestic investment are being finance with foreign

41、-controlled capitald) all of the above are trueAnswer d) 37 There is an intimate relationship between a countrys BCA and how the country finances its domestic investment and pays for government expenditures. This relationship is given by BCA X M (S I) + (T G). Given this, in order for a country to r

42、educe a BCA deficit, which of the following must occur?a) For a given level of S and I, the government budget deficit (T G) must be reducedb) For a given level of I and (T G), S must be increasedc) For a given level of S and (T G), I must falld) All of the above would work to reduce a BCA deficitAns

43、wer d) Explain how each of the following transactions will be classified and recorded in the debit and credit of the U.S. balance of payments:(1) A Japanese insurance company purchases U.S. Treasury bonds and pays out of its bank account kept in New York City.(2) A U.S. citizen consumes a meal at a

44、restaurant in Paris and pays with her American Express card.(3) A Indian immigrant living in Los Angeles sends a check drawn on his L.A. bank account as a gift to his parents living in Bombay.(4) A U.S. computer programmer is hired by a British company for consulting and gets paid from the U.S. bank account maintained by the British company.In contrast to the U.S., Japan has realized continuous current account surpluses. What could be the main causes for these surpluses? Is it desirable to have continuous current account surpluses?