International Trade Quiz

Read the article and answer the questions:

https://research.stlouisfed.org/publications/page1-econ/2016/11/01/international-trade/

What was the U.S. trade deficit in 2015?

• $531.5 billion

• $600 billion

• $500 billion

• $550 billion

What is the largest part of the current account in the balance of payments?

• Debt forgiveness

• Net investment income

• Net transfers

• Trade in goods and services

What is the capital and financial account in the balance of payments responsible for?

• Recording debt forgiveness and foreign purchases of assets

• Recording net transfers

• Recording net investment income

• Recording exports and imports of goods and services

What is a financial asset?

• Goods used to produce other goods and services

• A contract promising future cash payment

• A tangible item with intrinsic value

• A resource with economic value

What is the difference between a country's exports and imports called?

• Trade deficit

• Trade surplus

• Budget deficit

• Transfer

What is the main reason for the U.S. trade deficit according to economists?

• Inferior goods production

• National saving and investment decisions

• Currency manipulation

• Flawed trade policy

What does the balance of payments must do in terms of the current account and the capital and financial account?

• They must be equal

• They must be positive

• They must be negative

• They must be zero

What did former Federal Reserve Chair Ben Bernanke attribute the trade deficit to?

• Global savings glut

• Currency manipulation

• Inferior goods production

• Flawed trade policy

What is the role of national saving and investment in a growing economy?

• To reduce foreign investment

• To increase budget deficits

• To decrease worker productivity

• To finance business expansion