1/26 Class

Question 1

balance of payments

Answer 1

summary of transactions between domestic and foreign residents for a specific country over a specified period of time

Question 2

current account

Answer 2

summary of flow of funds due to purchases of goods

Question 3

financial account

Answer 3

direct foreign investment
portfolio investment
other capital investment
errors and omissions and reserves

Question 4

things that have increased trade volume

Answer 4

removal of the Berlin Wall
single european act of 1987
North American Free Trade Agreement NAFTA
General Agreement on Tariffs and Trade GATT
Inception of the Euro
Expansion of the European Union
Other Trade Agreements

Question 5

outsourcing on trade

Answer 5

the process of subcontracting to a third party in another country to provide supplies or services that were previously produced internally,
impact of outsourcing:
increased international trade activity because MNC’s now purchase products or services from another country
lower cost of operations and job creation in countries with low wages