Ch23 International Trade – Capital Flows

*Ch23 International Trade – Capital Flows*

*Multiple Choice Questions*

*1. *Goods and services produced in one country that are then sold in other countries are called ____________.

A. exports
B. tradeable items
C. surplus items
D. economic stimulants

Answer: A Reference:

Explanation:

Type: Multiple Choice

*2. *The term __________ is used to describe what those in one country buy from those in other countries.

A. exports
B. imports
C. trade
D. surplus

Answer: B Reference:

Explanation:

Type: Multiple Choice

*3. *The term _____________ describes circumstances where a country’s exports exceed its imports.

A. trade deficit
B. trade imbalance
C. trade surplus
D. trade balance

Answer: C Reference:

Explanation:

Type: Multiple Choice

*4. *The term _____________ describes circumstances where a country’s imports exceed its exports.

A. trade imbalance
B. trade balance
C. trade surplus
D. trade deficit

Answer: D Reference:

Explanation:

Type: Multiple Choice

*5. *The term “merchandise trade balance” is used to describe:

A. the balance of trade in services.
B. the balance of trade in goods.
C. the level of trade in goods.
D. the level of trade in services.

Answer: B Reference:

Explanation:

Type: Multiple Choice

*6. *A country’s current account balance refers to a broad measure of the balance of trade that includes:

A. merchandise, services, and foreign capital investments.
B. goods, foreign capital investments, exported domestic services.
C. goods and services, international flows of income, and foreign aid.
D. merchandise, foreign aid and imported domestic services.

Answer: C Reference:

Explanation:

Type: Multiple Choice

*7. *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.

A. foreign aid supplied; be lower than the quantity of domestic aid demanded
B. foreign financial capital imports; equal to supply of domestic capital available
C. foreign capital imports; less than the supply of domestic capital available
D. financial capital supplied; equal the quantity of capital financial demanded

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