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CHAPTER 10 THE BALANCE OF PAYMENTS MULTIPLE-CHOICE QUESTIONS 1. On the balance-of-payments statements, merchandise imports are classified in the: a. Current account b. Capital account c. Unilateral transfer account d. Official settlements account 2. The balance of international indebtedness is a record of a country’s international: a. Investment position over a period of time b. Investment position at a fixed point in time c. Trade position over a period of time d. Trade position at a fixed point in time 3. Which balance-of-payments item does not directly enter into the calculation of the U.S. gross domestic product? a. Merchandise imports b. Shipping and transportation receipts c. Direct foreign investment d. Service exports 4. Which of the following is considered a capital inflow? a. A sale of U.S. financial assets to a foreign buyer b. A loan from a U.S. bank to a foreign borrower c. A purchase of foreign financial assets by a U.S. buyer d. A U.S. citizen’s repayment of a loan from a foreign bank 5. Which of the following would call for inpayments to the United States? a. American imports of German steel b. Gold flowing out of the United States c. American unilateral transfers to less-developed countries d. American firms selling insurance to British shipping companies 6. In a country’s balance of payments, which of the following transactions are debits? a. Domestic bank balances owned by foreigners are decreased b. Foreign bank balances owned by domestic residents are decreased c. Assets owned by domestic residents are sold to nonresidents d. Securities are sold by domestic residents to nonresidents 7. Which of the following is classified as a credit in the U.S. balance of payments? a. U.S. exports b. U.S. gifts to other countries c. A flow of gold out of the U.S. d. Foreign loans made by U.S. companies Table 10.1 gives hypothetical figures for U.S. International Transactions. On the basis of this information, answer Questions 8 and 9. Table 10.1.U.S. I