Multiple Choice Answers

1. Which of the following appears as a positive item on the balance of payments account for the United States?
U.S. government sending aid to natural disaster victims in Asia
American tourists spending money in the other countries
Buying of U.S. Treasury bonds by a foreign bank
Payment of stock dividends by U.S. firms to foreign shareholders

2. (TCO 9) A trade deficit means a net
inflow of payments for goods and services.
outflow of goods and services.
inflow of goods and services.
excess of exports over imports.

3. (TCO 9) If a Japanese importer could buy $1,000 U.S. for 122,000 yen, the rate of exchange for $1 would be
8.19 yen.
122 yen.
820 yen.
1,220 yen.

4. (TCO 9) If the exchange rate is $1 = 0.7841 euro, then a French DVD priced at 20 euros would cost an American buyer (excluding taxes and other fees)
$15.68.
$20.78.
$25.51.
$27.84.