Question

1. What would be the best definition of the balance of payments?

Select one:

a. record of the value of goods and services bought and sold between countries.

b. summary record of a country’s financial transactions with other countries.

c. summary record of a country’s purchases and sales of goods and services on international trade markets.

d. measure of the value of merchandise goods bought and sold on international trade markets.

2. The current account of Canada will reflect the transaction involving

Select one:

a. all of the answers are correct

b. an Australian citizen purchasing shares in the Royal Bank of Canada.

c. a Canadian citizen purchasing shares in Qantas.

d. An Australian citizen purchasing pharmaceutical products made in Canada.

3. GDP will include

Select one:

a. The sale of a used car to a car rental agency

b. The sale of a new car to a car rental agency

c. The sale of a new car to a consumer for private use

d. The sale of a used car to a consumer for private use

4. The current account deficit can decrease because of

Select one:

a. An increase in imports

b. A decrease in exports

c. all answers are correct

d. decrease in the amount of income going to foreigners who own investments in the coutnry

Answer 1

1.Ans: b) summary record of a country’s financial transactions with other countries.

Explanation:

Balance of payments refers to the summary record of a country’s financial transactions with other countries or rest of the world.

2.Ans: a) all of the answers are correct

Explanation:

Current account consists of trade in goods and services , factors income , investment income and transfer income.

3.Ans: c) The sale of a new car to a consumer for private use

Explanation:

GDP refers to the final value of all goods and services which are produced within the country in a given year. It does not include the value of intermediate goods and services in order to avoid double counting.

4.Ans: d) decrease in the amount of income going to foreigners who own investments in the coutnry.