chapter 12: national income accounting and the balance of payments

Question 1

balance of payments

Answer 1

all transactions between residents and non-residents during a period of time.

Question 2

all transactions between residents and non-residents during a period of time.

Answer 2

balance of payments

Question 3

current account

Answer 3

net exports of goods and services (include primary and secondary incomes)

Question 4

net exports of goods and services (include primary and secondary incomes)

Answer 4

current account

Question 5

primary income (part of the current account)

Answer 5

wages and dividends received by national production factor abroad

Question 6

wages and dividends received by national production factor abroad

Answer 6

primary income (part of the current account)

Question 7

secondary income (part of the current account)

Answer 7

transfer payment (e.g. pension) of nationals abroad

Question 8

transfer payment (e.g. pension) of nationals abroad

Answer 8

secondary income (part of the current account)

Question 9

financial account

Answer 9

records the international sales or purchases of assets

Question 10

records the international sales or purchases of assets

Answer 10

financial account

Question 11

capital account

Answer 11

mostly nonmarket activities, or represent the acquisition or disposal of nonproduced, nonfinancial, and possibly intangible assets (such as copyrights and
trademarks).

Question 12

mostly nonmarket activities, or represent the acquisition or disposal of nonproduced, nonfinancial, and possibly intangible assets (such as copyrights and
trademarks).

Answer 12

capital account

Question 13

balance of payments identity

Answer 13

current account + capital account = financial account

Question 14

debit

Answer 14

payment to non-resident

Question 15

credit

Answer 15

payment from non-resident

Question 16

net foreign investment

Answer 16

current account surplus

Question 17

net foreign wealth

Answer 17

stock of foreign assets

Question 18

national income identity

Answer 18

Y=C+G+CA

Question 19

GNP / GDP

Answer 19

gross national product = income of all the national factors of production. GDP domestic = income of all factors of production geographically in the country.

Question 20

financial (or capital) inflow

Answer 20

credit entry in the financial account

Question 21

financial (or capital) outflow

Answer 21

debit entry in the financial account

Question 22

official international reserves

Answer 22

net foreign wealth of the central bank

Question 23

net foreign wealth of the central bank

Answer 23

official international reserves

Question 24

official settlements balance

Answer 24

financial account of the central bank