1.The purchase of a meal by an American tourist at La Tour d’Argen (a restarant in Paris) would find its way into the American balance of payment as a

a. positive entry in the current account

b. positive entry in the financial and capital account

c. negative entry in the current account

d. negative entry in the financial and capital account

2. for the foreign exchange market, exports from the US generate a

a. supply of dollars and imports to the US also generate supply of dollars

b. supply of dollars and imports to the US generate a demand for dollars

c. Demand for dollars and imports to the US generate a supply of dollars

d. demand for dollars and imports to the US also generate a demand for dollars

3. The exchange rate is the:

a. Price of one good in terms of another

b. Price of one asset in terms of another

c. Price of one currency in terms of another

d. rate at which exports are traded for importance

4. Suppose a European stock cost €200 and the exchange rate is $.95 per euro. The cost of this stock to American investor would be

a. $95

b. $190

c. $200

d. $210

Answer rating: 100% (QA)

1 c negative entry in the current account The current account may be positive a surplus or negative ... View the full answer