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Lesson Worksheet: International Economic Relations and Balance of Payment Accounts Economics

In this worksheet, we will practice identifying the characteristics of international economic relations and the components of a country’s balance of payment accounts.

Q1:

Which of the following is recorded as credit under the balance of payments on the current account?

  1. Stock dividends received from a foreign share
  2. Imported cars
  3. Exported petroleum
  4. International tourism in the country
  • AIII only
  • BI and III
  • CII only
  • DI, II, III, and IV
  • EI, III, and IV

Q2:

Which of the following is not an example of international trade?

  • AInvesting in a foreign stock market
  • BTaking a vacation in another country
  • CImporting petroleum from another country
  • DHiring an engineer from another country
  • EExporting cars to another country

Q3:

Which of the following is correct about a country’s balance of payment account?

  • AIt contains a record of every economic activity with other countries.
  • BThe net balance on the account is always equal to zero.
  • CAny money going out of the country is recorded as credit, while any incoming money is recorded as debit.
  • DIt contains useful data for understanding trends in the national economy.
  • EIt contains projections on inflows and outflows of the country in the international market.

Q4:

Which of the following are not a type of capital transfer?

  • AMedium-term and long-term loans
  • BShort-term loans
  • CInternational loans for economic development
  • DImports and exports

Q5:

Which of the following is not an accurate description of medium-term and long-term loans in capital transfers?

  • ADirect investments are an important type of medium-term and long-term loans.
  • BMedium-term and long-term loans are associated with investments in new projects.
  • CMedium-term and long-term loans include economic aids made to developing countries.
  • DIf a person invests directly in a project in another country, the person is considered an owner rather than a creditor.

Q6:

Which of the following best describes the motives for issuing medium-term and long-term loans in capital transfers?

  • AFinancing new projects to encourage production
  • BHelping developing countries to achieve economic growth
  • CIncreasing the volume of trade exchange between countries
  • DProtecting major businesses from bankruptcy

Q7:

Which of the following best describes the motives for issuing short-term loans in capital transfers?

  • AProtecting major businesses from bankruptcy
  • BHelping developing countries to achieve economic growth
  • CIncreasing the volume of trade exchange between countries
  • DFinancing new projects to encourage production

Q8:

Which of the following is the most accurate description of loans from international organizations such as the IMF?

  • AThe loans from international organizations are long-term loans only.
  • BThey are loans from international organizations to help developing countries achieve economic growth.
  • CAs compensation for their economic aid, developed countries receive partial ownership of businesses in the recipient country of the aid.
  • DThey allow a country’s central bank to issue new banknotes without the risk of the country’s currency losing value.

Q9:

Which of the following is not a characteristic of international economic relations?

  • ADifference in language, customs, and values
  • BExistence of political borders
  • CDifference in currency
  • DExistence of transportation costs
  • EHaving similar market price of goods and services

Q10:

Which of the following are recorded as a debit transaction in the balance of payments on the capital accounts?

  1. Stock purchased from a foreign market
  2. Bond sold to a foreign investor
  3. Exported petroleum
  4. Real estate sale to a foreign national
  • AI only
  • BI and IV
  • CII, III, and IV
  • DII and IV
  • EAll of the answers are correct.

This lesson includes 33 additional questions for subscribers.

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