unit 7

Question 1

If US currency is expensive we will

Answer 1

import more

Question 2

The Capital Account formula

Answer 2

Capital Inflows - Capital Outflows

Question 3

If real interest rates on savings bonds are higher in the US the US will

Answer 3

have a capital inflow

Question 4

If real interest rates on savings bonds are lower in the US the US will

Answer 4

have a capital outflow

Question 5

if a US company builds a factory in a different country the US has a

Answer 5

capital outflow

Question 6

Common stocks

Answer 6

have voting rights and the company may pay a dividend.

Question 7

Preferred stocks

Answer 7

do not have voting rights the company guarantees a dividend.

Question 8

Dividends

Answer 8

are profits distributed to the owners based on how many shares they have - may be cash or more shares.
-Capital gains are profits on your stocks. They become actual gains when you sell the stock.

Question 9

Bull traders want

Answer 9

the stock price to go up. to buy and sell stock

Question 10

Bear traders want

Answer 10

the stock price to go down. They short sell and short cover stocks.

Question 11

Buying on margin means

Answer 11

borrowing money to buy stocks and is very risky.