C222

Recently, the U>S experienced an annual balance of trade representing a

• large surplus (exceeding 100 bilion)

• small surplus

• level of zero

• deficit

If a country's government imposes a tariff on imported goods, that country's current account balance will likely______(assuming no retaliation by other governments)

• decrease

• increase

• remain unaffected

• decrease; increaseeither A or C are possible

A high home inflation rate relative to other countries would ____ the home country's current account balance, other things equal. A high growth in the home income level relative to other countries would _______ the home country's current account balance, other things equal.

• increase; increase

• increase; decrease

• decrease;decrease

• decrease; increase

______ purchases more U.S exports than the other countries listed here

• Italy

• Spain

• Mexico

• Canada

An increase in the current account deficit will place _____ pressure in the home currency value, other things equal

• Upward

• downward

• no

• upward and downward ( depending on the size of the deficit )

If the home currency begins to appreciate against other currencies, this should_____the current account balance, other things equal ( assume that substitutes are available in the countries and that the prices charged by firms remain the same )

• increase

• have no impact on

• reduce

• all of the above are equally possible

The International Financial Corporation was established to :

• enhance development solely in Asia through grants

• enhacne economic development through no-subsidized loans ( at market interest rates )

• enhance economic development through lo-interest rate loans ( below - market rates )

• enhance economic development of the private sector through investment in stock of corporations

The World Bank was established to

• enhance development solely in Asia through grants

• enhacne economic development through no-subsidized loans ( at market interest rates )

• enhance economic development through lo-interest rate loans ( below - market rates )

• enhance economic development of the private sector through investment in stock of corporations

The International Development Association was established to:

• enhance development solely in Asia through grants

• enhacne economic development through no-subsidized loans ( at market interest rates )

• enhance economic development through lo-interest rate loans ( below - market rates )

• enhance economic development of the private sector through investment in stock of corporations

Which of the following would likely have the least direct influence on a country's current account

• inflation

• national income

• exchange rates

• tariffs

• a tax on income earned from foreign stocks