Top 250+ Solved International Economics MCQ Questions Answer
Q. Unlike the balance of payments, the balance of international indebtedness indicates the international:
a. Investment position of a country at a given moment in time
b. Investment position of a country over a one-year period
c. Trade position of a country at a given moment in time
d. Trade position of a country over a one-year period
Q. Which of the following indicates the international investment position of a country at a given moment in time?
a. The balance of payments
b. The capital account of the balance of payments
c. The current account of the balance of payments
d. The balance of international indebtedness
Q. Concerning the U.S. balance of payments, which account is defined in essentially the same way as the net export of goods and services, which comprises part of the country’s gross domestic product?
a. Merchandise trade account
b. Goods and services account
c. Current account
d. Capital account
Q. If an American receives dividends from the shares of stock she or he owns in Toyota, Inc., a Japanese firm, the transaction would be recorded on the U.S. balance of payments as a:
a. Capital account debit
b. Capital account credit
c. Current account debit
d. Current account credit
Q. If the United States government sells military hardware to Saudi Arabia, the transactionwould be recorded on the U.S. balance of payments as a:
a. Current account debit
b. Current account credit
c. Capital account debit
d. Capital account credit
Q. The U.S. balance of trade is determined by:
a. Exchange rates
b. Growth of economies overseas
c. Relative prices in world markets
d. All of the above
Q. U.S. military aid granted to foreign countries is entered in the:
a. Merchandise trade account
b. Capital account
c. Current account
d. Official settlements account
Q. If the U.S. faces a balance-of-payments deficit on the current account, it must run a surplus on:
a. The official settlements account
b. The capital account
c. Either the official settlements account or the capital account
d. Both the official settlements account and the capital account
Q. The current account of the U.S. balance of payments does not include:
a. Investment income
b. Merchandise exports and imports
c. The sale of securities to foreigners
d. Unilateral transfers
Q. The U.S. has a balance of trade deficit when its:
a. Merchandise exports exceed its merchandise imports
b. Merchandise imports exceed its merchandise exports
c. Goods and services exports exceed its goods and services imports
d. Goods and services imports exceed its goods and services exports
Q. The value to American residents of income earned from overseas investments shows up in which account in the U.S. balance of payments?
a. Current account
b. Trade account
c. Unilateral transfers account
d. Capital account
Q. What would be the effects of an export subsidy on oil imposed by Russia?
a. Relative world supply of oil rises and relative world demand falls.
b. Relative world supply of oil falls and relative world demand rises.
c. Relative world supply of and relative world demand for oil rise.
d. Relative world supply of and relative world demand for oil fall.
Q. If the central bank purchases assets, it will result in:
a. An increase in the central bank's net worth.
b. A decline in the central bank's net worth.
c. An increase in the money supply.
d. A decline in the money supply.
Q. If there is a decline in output, to keep the exchange rate fixed, the central bank has to:
a. Sell domestic assets.
b. Purchase foreign assets.
c. Sell foreign assets.
d. Purchase domestic assets.
Q. What is the effect of an increase in taxes under fixed exchange rates and perfect asset substitutability in the short run?
a. A decline in output and no change in interest rates.
b. A decline in output and interest rates.
c. An increase in output and no change in interest rates.
d. An increase in output and interest rates.