Capital Account 1

Question 1

Economy’s foreign assets vs. economy’s foreign liabilities

Answer 1

Net international investment position AKA net foreign assets

Question 2

Country’s capital and financial account measures flow of (2)

Answer 2

Financial claims (changes in asset positions)

Question 3

One who owes amount of money

Answer 3

Debtor

Question 4

Net claim

Answer 4

Liability owed

Question 5

A country’s net claim on another country means

Answer 5

That country extended credit for other country to pay back

Question 6

If country’s net claims on the rest of the world exceed their claims on it

Answer 6

It has positive net foreign assets

Question 7

A country with positive net foreign asset is considered

Answer 7

A net creditor

Question 8

A country with negative foreign assets is considered a

Answer 8

Net debtor

Question 9

Change between net creditor to debtor occurs in

Answer 9

Capital and financial account

Question 10

The financial account of a country measures

Answer 10

Increases/decreases in international ownership of assets

Question 11

Country capital account measures

Answer 11

Financial transactions that do not affect income, production, savings

Question 12

Financial transactions that country’s capital account measures (3)

Answer 12

International transfer of drilling rights, trademarks, copyrights (intangible)

Question 13

Country’s current account represents

Answer 13

Country’s net income over a period of time

Question 14

Country’s capital account records

Answer 14

Net changes of assets/liabilities during a particular year

Question 15

Any surplus and deficit in the current account is

Answer 15

Matched and canceled out by an equal surplus or deficit in the capital account

Question 16

Country’s current account deals with (2)

Answer 16

Country’s short term transactions, difference between its savings and investments

Question 17

Country’s short term transactions referred to as

Answer 17

Actual transactions

Question 18

Actual Transactions have real impact on (3)

Answer 18

Income,output,employment level

Question 19

How do Actual Transactions have an impact on income, output, employment level

Answer 19

Through the movement of goods and services in an economy

Question 20

Visible trade

Answer 20

Export/import of goods

Question 21

Invisible trade

Answer 21

Export/import of services

Question 22

The current account consists of (3)

Answer 22

Visible/invisible trade, unilateral transfers, investment income

Question 23

Investment income examples (countries) (2)

Answer 23

Land, foreign shares

Question 24

Unilateral transfers definition

Answer 24

One way transfer of money, goods, services from one party to another

Question 25

Unilateral transfer examples (2)

Answer 25

Payments given by governments to their citizens, one country to another with foreign aid

Question 26

Credit and debit of foreign exchange also recorded in

Answer 26

Balance of current account

Question 27

The resulting balance of the current account is approximated as

Answer 27

Sun total of balance of trade