Test bank International Finance MCQ wordChap 4.docx

1、Test bank International Finance MCQ wordChap 4Fundamentals of Multinational Finance, 3e (Moffett) Chapter 4 The Balance of Payments4.1 Multiple Choice and True/False Questions1) The balance of payments as applied to a course in international finance may be defined as A) the amount still owed by an e

2、xporting firm after making an initial down payment. B) the amount still owed by governments to the International Monetary Fund. C) the measurement of all international economic transactions between the residents of a country and foreign residents. D) the amount of a countrys merchandise trade defici

3、t or surplus. Answer: C Topic: BOP Introduction Skill: Conceptual2) Balance of payment (BOP) data may be important for any of the following reasons: A) BOP data helps to forecast a countrys market potential, especially in the short run. B) The BOP is an important indicator of a countrys foreign exch

4、ange rate. C) Changes in a countrys BOP may signal a change in controls over payment of dividends and interest. D) All of the above. Answer: D Topic: BOP Introduction Skill: Conceptual3) A country experiencing a serious BOP _ is more likely to _ exports than otherwise. A) surplus; contract B) defici

5、t; contract C) deficit; expand D) none of the above Answer: A Topic: BOP Understanding Skill: Analytical4) Which of the following would NOT be considered a typical BOP transaction? A) Toyota U.S.A. is a U.S. distributor of automobiles manufactured in Japan by its parent company. B) The U.S. subsidia

6、ry of European financial giant, Credit Suisse, pays dividends to its parent in Zurich. C) A U.S. tourist purchases gifts at a museum in London. D) All are example of BOP transactions. Answer: D Topic: BOP Understanding Skill: Conceptual5) The authors identify a tip for understanding BOP accounting.

7、They recommend that you follow the cash flow. Answer: TRUE Topic: BOP Introduction Skill: Recognition 6) The BOP must be in balance but the current account need not be. Answer: TRUE Topic: Current Account Skill: Recognition7) Which of the following is NOT a part of the Current Account of BOP? A) net

8、 export/import of goods B) Balance of Trade C) net portfolio investment D) net export/import of services Answer: C Topic: Current Account Skill: Recognition8) Which of the following is NOT part of the Financial Account of the BOP? A) net foreign direct investment. B) net import/export of services C)

9、 net portfolio investment D) other Financial items Answer: B Topic: Financial Account Skill: Recognition9) Expenditures by U.S. tourists in foreign countries for foreign goods or services are factored into BOP calculations. Answer: TRUE Topic: BOP Understanding Skill: Recognition10) Which of the fol

10、lowing is NOT an item to be considered in BOP calculations? A) A foreign resident purchases a U.S. Treasury Bill. B) A U.S.-based firm manages the development of an oil field in Kazakhstan. C) A consumer buys a VCR made in Korea from a Wal-Mart store. D) A U.S. citizen living in Minnesota travels to

11、 Winnipeg, Canada and buys a case of LaBatts Canadian beer. Answer: C Topic: BOP Understanding Skill: Conceptual11) The balance of payments is most like a(an) _. A) cash flow statement B) balance sheet C) income statement D) proxy statement Answer: A Topic: Balance of payments Skill: Recognition 12)

12、 The balance of payments A) determines the eligibility of countries for IMF aid. B) adds up the value of all assets and liabilities of a country on a specific date. C) records all international transactions for a country over a period of time. D) all of the above. Answer: C Topic: Balance of payment

13、s Skill: Recognition13) According to the authors, the following types of transactions dominate the balance of payments: A) the exchange of guns for butter. B) the exchange of stocks and bonds. C) the exchange of goods and services. D) the exchange of real and financial assets. Answer: D Topic: Balan

14、ce of payments Skill: Conceptual14) Which of the following is NOT an example of an exchange of financial assets? A) the exchange of travel services B) the exchange of stocks C) the exchange of bonds D) loans Answer: A Topic: Current Account Skill: Conceptual15) Because current and financial/capital

15、account balances use double-entry book keeping it is unusual to find serious discrepancies in the debits and credits. Answer: FALSE Topic: Balance of payments Skill: Recognition16) Which of the following is NOT part of the balance of payments account? A) the current account B) the financial/capital

16、account C) the official reserves account D) All of the above are BOP accounts. Answer: D Topic: Balance of payments Skill: Recognition17) The _ includes all international economic transactions with income or payment flows occurring within the year. A) capital account B) current account C) financial

17、account D) IMF account Answer: B Topic: Current Account Skill: Recognition 18) If your company were to import and export textiles, the transactions would be recorded in the current account subcategory of _. A) services trade B) income trade C) goods trade D) current transfers Answer: C Topic: Curren

18、t Account Skill: Conceptual19) The travel services provided to international travelers by United Airlines would be recorded in the current account subcategory of _. A) services trade B) income trade C) goods trade D) current transfers Answer: A Topic: Current Account Skill: Conceptual20) Anaconda Co

19、pper Inc. created a subsidiary in Chile last year to mine copper ore. The proportion of net income paid back to the parent company as a dividend would be recorded in the current account subcategory of _. A) services trade B) income trade C) goods trade D) current transfers Answer: B Topic: Current A

20、ccount Skill: Conceptual21) The subcategory that typically dominates the current account is _. A) goods (merchandise) trade B) services trade C) income trade D) transfer accounts Answer: A Topic: Current Account Skill: Recognition22) Over the last several years, the United States has run a _ in the

21、goods trade balance and a _ in the services trade balance. A) surplus; deficit B) surplus; surplus C) deficit; deficit D) deficit; surplus Answer: D Topic: Current Account Skill: Conceptual 23) In general, the United States goods trade balance has grown increasingly positive over the last 3 years. A

22、nswer: FALSE Topic: Current Account Skill: Recognition24) In 2001 the United States posted a current account deficit of -$393 billion. The bulk of the negative value came from A) a net transfer deficit. B) an income balance deficit. C) a goods trade deficit. D) an income trade deficit. Answer: C Top

23、ic: Current Account Skill: Recognition25) In general, as a countrys income increases, so does the demand for imports. Answer: TRUE Topic: Economic Theory Skill: Conceptual26) In general, a countrys exports decrease as foreign income decreases. Answer: TRUE Topic: Economic Theory Skill: Conceptual27)

24、 Over the last two decades the surplus on U.S. services trade has typically been _ the deficit on U.S. goods trade. A) greater than B) equal to C) less than D) The relationship is constantly shifting from greater than to less than. Answer: C Topic: Balance of Trade Skill: Recognition28) The _ of the

25、 balance of payments measures all international economic transactions of financial assets. A) current account B) merchandise trade account C) services account D) capital/financial account Answer: D Topic: Capital/Financial Account Skill: Recognition 29) The financial account consists COMPLETELY of w

26、hich three components? A) stock investment, bond investment, and mutual fund investment B) direct investment, stock investment, and bond investment C) direct investment, portfolio investment, and other asset investment D) mutual fund investment, portfolio investment, and stock investment Answer: C T

27、opic: Capital/Financial Account Skill: Recognition30) When categorizing investments for the financial account component of the balance of payments the _ is an investment where the investor has no control whereas the _ is an investment where the investor has control over the asset. A) direct investme

28、nt; portfolio investment B) direct investment; indirect investment C) portfolio investment; indirect investment D) portfolio investment; direct investment Answer: D Topic: Capital/Financial Account Skill: Recognition31) Which of the following would NOT be considered a direct investment either into or from the United States? A) the purchase of U.S. Treasury (debt) securities B) Ford Motor Company building an assembly plant in Mexico C) Honda of Japan building a manufacturing plant in Ala