unit 14

a surplus in the balance of payments is best described as...

More money flowing into the United States than out.

The flow of money between the United States and other countries is known as...

The balance of payments. The balance of payments represents the flow of money between the United States and other countries.

The largest component of the US balance of payments is...

The balance of trade. US imports and exports are the components used to calculate the balance of trade. The balance of trade is the measure of those two imports against each other, the net being either more money coming into or going out of the US economy. that measure, the balance of trade, is the largest component of the US balance of payments.

a week US dollar it leads to more...

US exports and balance of payments surplus.

a strong US dollar leads to more...

US imports and balance of payments deficit. when the dollar is strong it is more affordable for US consumers to buy more foreign goods, so US imports increase as more imported goods flow in more money flows out deficit.

a US balance of payments deficit would decrease in all the following scenarios except...

a decrease in purchases of US securities by foreign investors. a deficit in the balance of payments occurs when more money is flowing out of out of the country then in.

All the following would decrease the US balance of payments deficit except... an increase in exports of domestic goods from the United States. a decrease in imports of foreign goods into the United States. a decrease in purchases of US securities by foreign investors. a decrease in dividend payments by US companies to foreign investors.

a decrease in purchases of securities by foreign investors. anything that will bring foreign money to the United States will decrease the balance of payments. foreign investors pulling their money out of the United States or investing less in the United States will increase the US deficit.

of the statements listed which best characterizes the potential impact of factors occurring outside our domestic economy and markets?

factors outside the United States can have immediate and prolonged impact on our securities and trade markets and thus our domestic economy.

you should expect which of these to occur when the dollar strengthens against other currencies? imports will become more expensive. imports will become less expensive. inflation will go down. inflation will rise.

imports will become less expensive. inflation will go down. as the dollar gains strength against other currencies, the cost of imports goes down in dollar terms. domestic producers will need to compete with less expensive imports. that keeps prices from rising reducing inflationary pressures.

Acer plus in the United States balance of payments can occur if... interest rates in foreign countries are higher than US domestic rates. interest rates in foreign countries are lower than US domestic rates. US consumers are purchasing foreign goods. foreign consumers are purchasing / importing US goods. ​

interest rates and foreign countries are lower than US domestic rates. foreign consumers are purchasing / importing US goods. anything that brings money into our domestic economy leads to a surplus / more money coming in than going out. when interest rates abroad are comparatively lower, money flows into the United States to earn a better rate. when foreign consumers are purchasing more US domestic goods and services, money flows into the United States as well.

a deficit in the US balance of payments can occur if... interest rates and foreign countries are higher than US domestic rates. interest rates in the foreign countries are lower than US domestic rates. US consumers are purchasing / importing foreign goods. foreign consumers are purchasing / importing US goods.

interest rates in foreign countries are higher than US domestic rates. US consumers are purchasing / importing foreign goods. anything that sends money out of our domestic economy leads to a deficit / more money flowing out than coming in. when interest rates abroad are higher, money flows out of the United States to those foreign countries. when US consumers are purchasing more foreign goods and services money flows out from the United States to those foreign markets.