assignmen 1 for FIN340.docVIP

PAGE  PAGE 8 Assignment One for FIN340 Answer Sheet Question 1 1234567891011121314151617181920Question 2 Question 3 Question 1 Multiple Choice Questions 1.?The trade balance, which is the difference between a countrys exports and imports, is a component of the countrys GDP. Other components of GDP include?A.?Consumption and investment and government expenditure.B.?Consumption and government expenditure and net exports.C.?Consumption and net exports and government expenditure.D.?Consumption less imports. 2.?If the United States imports more than it exports, then this means that?A.?The supply of dollars is likely to exceed the demand in the foreign exchange market, ceteris paribus.B.?The demand for dollars is likely to exceed the supply in the foreign exchange market, ceteris paribus.C.?The U.S. dollar would be under pressure to appreciate against other currencies.D.?Both b) and c) are correct 3.?Generally speaking, any transaction that results in a receipt from foreigners?A.?Will be recorded as a debit, with a negative sign, in the U.S. balance of paymentsB.?Will be recorded as a debit, with a positive sign, in the U.S. balance of paymentsC.?Will be recorded as a credit, with a negative sign, in the U.S. balance of paymentsD.?Will be recorded as a credit, with a positive sign, in the U.S. balance of payments 4.?Suppose the McDonalds Corporation imports Canadian beef, paying for it by transferring the funds to a New York bank account kept by the Canadian Beef producer.?A.?Payment by McDonalds will be recorded as a debitB.?The deposit of the funds by the seller will be recorded as a debitC.?Payment by McDonalds will be recorded as a creditD.?The deposit of the funds by the buyer will be credit 5.?When a countrys currency depreciates against the currencies of major trading partners,?A.?The countrys exports tend to rise and imports fall.B.?The countrys exports tend to fall and imports rise.C.?The co