practice exam 3

which of the following represents the national savings and investment identity

S + (M-X) = I + (G-T)

which of the following countries suffered deep recessions as a result of pessimistic foreign investors moving their money to other countries?

South Korea, Russia, Indonesia, Thailand, Argentina, Malaysia

2 main sources for supply of capital in US economy

1) domestic savings from individuals and firms 2) inflows of financial capital from foreign investors

in the US all companies involved in international flows of capital must file reports, which are ultimately compiled by the

Department of treasury

from an economic perspective, returns on foreign investment are included in the overall measure of trade because financial investments:

are a form or trade that takes place in the financial capital market

which of the following terms is sometimes used to describe the balance of trade

balance of payments

one of the following must be used as a starting point in order to perform an analysis that will determine what the connections between imbalances of trade in goods and services and the flows of international financial capital. which is it?

balance of trade

which of the following represents a financial inflow into the US economy

canadian investors buying real estate in arizona

in the US which gov institutions would most likely provide economists with the best data for merchandise trade

census bureau

what is the most common method of measuring flows of trade

comparing exports or goods, services, and financial capital between countries

economists typically rely on a broader measure of international trade known as the __________ which includes ____________________

current account balance; goods, services, international income flows, and foreign aid

from a macroeconomic perspective, if GDP economic indicators show a decline of 10% or more in a single year, then which of the following outcomes is most likely to result?

deep economic recession

a country's current national savings and investment identity is expressed (M-X) = I-S-(T-G). in this instance

domestic investment is higher than domestic savings

in what way are the factors used to calculate the current account balance similar to each other

each involves a flow of financial payments between countries

one insight that can be obtained from the national saving and investment identity is that a nation's balance of trade is determined by

each nation's own levels of domestic savings and domestic investment

trade surpluses and trade deficits can be _______ for an economy in certain circumstances

either a or b

if imports ___________, then the economy is trade deficit

exceed exports

if exports __________, then the economy is trade surplus

exceed imports

from a macroeconomic perspective, a payment made by a foreign firm to a US investor looks just like an

export of a service

goods and services produced in one country that are then sold in other countries are called:

exports

when some countries increase their imports as a result or worldwide economic growth, other countries must be increasing their

exports as demand in all countries substantially rises

with respect to the national saving and investment identity for any country, the quantity of __________ at any given time by savings must ____________ for purposes of making investments

financial capital supplied; equal to quantity of financial capital demanded

A country's current account balance refers to a broad measure of the balance of trade that includes:

goods and services, international flows of income and foreign aid

a rise in domestic investment means

higher trade deficit

the term ______ is used to describe what those in one country buy from those in other countries

imports

generating a trade surplus and an overall net inflow of capital is

impossible

the extent to which a national economy is involved in global trade

is not very strongly related to either a or b above

if a country's current account balance is zero and the financial payments flowing in and out of the country's economy are equal, then which of the following must be a true statement?

it is not an overall or a net investor in other countries

the national saving and investment identity teachers that the rest of the economy can absorb an inflow of foreign financial capital by

leaving domestic saving and investment unchanged using any of the above

rise in domestic savings means

less foreign capital to meet investment needs, gov policy will increase private savings, country's trade deficit will decline

an economy with a larger involvement in foreign trade

may measure its exports as a share of GDP

an economics professor is discussing a measure of trade that involves a comparison of exports and imports of goods for the year just ended. what is this measurement?

merchandise trade balance

which of the following would most likely be included in the negative side of the current account balance?

money earned by Canadian firms in the US

which of the following would most likely be included in the positive side of the US current account balance?

money earned by US firms in Europe

a trade surplus means that there is a net

outflow of capital

to a macroeconomist, a trade deficit is the same as

outflow of financial capital

a country's current national savings and investment identity is expressed X-M= S + (G-T) - I. in this instance

private and public domestic savings are higher than domestic investment

the balance of trade refers to the gap that can exist between what a nation's ______ and a nation's ___________________

producers sell abroad, imports

which of the following represents a financial inflow to the us economy

returns paid on US financial investments in Switzerland

assume that the level of domestic investment rises while the level of private and public saving remains constant.

rise in domestic investment means higher trade deficit

which of the following will strongly influence a nation's level of trade

size of its economy, its geographic location, and its history of trade

the term "merchandise trade balance" is used to describe:

the balance of trade in goods

if exports and imports are equal:

then trade is balanced

why would an analyst include air plane parts, legal services and software in an analysis of international economic trade?

to determine the current account balance

the term _______ describes circumstances where a country's imports exceed exports

trade deficit

a period of strong economic growth tends to make a ___________

trade deficit larger

a recession tends to make a _________

trade deficit smaller

from a macroeconomic perspective, an economic transaction in the form of a financial investment is synonymous with which of the following?

trade in the financial capital market

the term _____ describes certain circumstances where a country's exports exceed its imports

trade surplus

a series of macroeconomic events has led an economy into a deep recession, which of the following factors is most likely to have initiated this series of events?

unbalanced trade

which of the following represents financial outflow from us economy

us firms buying logging rights to chinas forests

which of the following represents financial outflow from us economy

us investors buying foreign assets in germany