International Finance Chapter 2

What is the summary of flow of funds due to purchases of goods or services or the provision of income on financial assets?

• Primary Income Payments

• Financial Account

• Current Account

• Capital Account

Which factor can affect international trade flows by influencing the cost of labor?

• Credit conditions

• Government policies

• Inflation

• National income

What does the Financial Account refer to?

• Transactions involving short-term financial assets between countries

• New direct foreign investment over a given period

• New portfolio investment over a given period

• Special types of investment including DFI and portfolio investment

How can government policies increase imports?

• Restrictions on imports

• Subsidies for exporters

• Restrictions on piracy

• Environmental restrictions

What is the major objective of the International Monetary Fund (IMF)?

• Promote cooperation among countries on international monetary issues

• Provide loans to enhance economic development

• Facilitate governance in governments and corporations of countries with market economics

• Extend loans at low interest rates to poor nations

What is the purpose of the World Bank's Structural Adjustment Loans (SALs)?

• To facilitate multilateral trade negotiations

• To promote stability in exchange rates

• To provide temporary funds to member countries

• To enhance a country's long-term economic growth

What does the Bank for International Settlements (BIS) facilitate?

• Cooperation among countries with regard to international transactions

• Extension of loans at low interest rates to poor nations

• Promotion of free mobility of capital funds across countries

• Facilitation of governance in governments and corporations of countries with market economics

Which agency focuses on the needs of Latin America?

• European Bank for Reconstruction and Development

• Inter-American Development Bank

• African Development Bank

• Asian Development Bank

What is the impact of a weak home currency solution on international trade?

• Prearranged international trade transactions

• Impact of other currencies

• Intracompany trade

• Competition

What is the summary of flow of funds resulting from the sale of assets between one specified country and all other countries over a specified period of time?

• Current Account

• Capital Account

• Financial Account

• Secondary Income