25) the social security system is financed by A) a tax on luxury goods B) a payrolll tax paid by both employers and employees C) a tax on individual retirement accounts D) a payroll tax paid only by employers 26) a system of accounts that measures the transactions of goods services income and financial assets between domestic households , businesses, and governments and residents of the rest of the world during a specific time period is the A) balance of payments B) balance of trade C) current account D) capital account 27) which of the following is an example of surplus item on the balance of payments ? A) purchases of gold from foreign residents B) interest receipts from foreign residents C) public gifts to foreign residents D) private gifts to foreign residents 28) net unilateral transfers would appear in nations A) capital account B) financial account C) current account D) official reserve transaction account 29) an example of a deficit item on the U.S balance of payment is A) a deposit in a bank Chicago by the government of Saudi Arabia B) the purchase of Japanese yen by a U.S firm C) the payment of a dividend by a British firm to a U.S family D) the sale of a spark plug made by a U.S firm in Michigan to a Nissan plant in Tennessee 30) an increase in a country's rate of inflation is apt to A) lower it's nominal rate of interest and encourages an inflow of capital B) decrease-demand for the country's currency C) reduce its imports and improves its trade balance D) worse. It's balance of trade and balance of payments 32) which of the following will lead to an appreciation of the U.S dollar against the British pound ? A) an increase in British interest rates B) a decrease in British demand for the U.S assets C) an increase in U.S demand for the British imports D) an increase in British demand for U.S imports 33) the Japanese yen will appreciate against the dollar if A) Japanese residents demand more U.S goods B) none of above C) U.S residents demand more Japanese goods D) U.S residents demand fewer Japanese goods 35) under the gold standard because all currencies had values fixed in units of gold A) exchange rates were effectively fixed B) there were no exchange rates C) exchange rates were set to a crawling peg D) none of above 36) which of the following will cause a change in the exchange rate? A) changes in the perception of economic stability B) changes in real interest rates C) changes in consumer preferences D) all of the above