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
