Unit 7 Learning Target 3 Practice Quiz

"Measure of the flow of financial and economic capital to and from the country;" best defines which of the following terms?

• Balance of Payments

• Financial/Capital Account

• Current Account

• Balance of Trade

Will the following scenario cause the US Balance of Trade to move toward a TRADE SURPLUS or a TRADE DEFICIT?

An American buys 35 pounds of chocolate made in Germany.

• Trade Surplus

• Trade Deficit

Will the following scenario cause the US Balance of Trade to move toward a TRADE SURPLUS or a TRADE DEFICIT?

A car dealership in Tokyo buys 1,000 Tesla vehicles (which are produced in the US).

• Trade Surplus

• Trade Deficit

Capital/Financial account includes

• Buying of Foreign Company’s Stocks and Bonds

• Money Invested in Buying Economic Capital in a Foreign Country

• Money Put into Foreign Banks

• all of them

The Current Account includes

• Dividend Payments from Investments

• Interest Payments from Savings Accounts

• International Aid

• all of them

Jorge Martinez from Spain buys a shopping center in Florida. How would this be recorded in the US's Balance of Payments?

• A credit in the capital/financial account

• A debit in the capital/financial account

• A credit in the current account

• A debit in the current account

The acquisition of a US-based pro football team by a rich foreign investor would count as

• A debit on the capital/financial account

• A credit on the current account

• A debit on the current account

• A credit on the capital/financial account

How is the payment of interest on foreign loans recorded in the US's Balance of Payments?

• As a debit in the current account

• As a credit in the current account

• As a debit in the capital/financial account

• As a credit in the capital/financial account

How is spending by US tourists visiting Australia recorded in the US's Balance of Payments?

• As a credit in the current account

• As a debit in the capital/financial account

• As a debit in the current account

• As a credit in the capital/financial account