. Multiple-choice Question There is only one correct choice for each question

1. The balance of payments system records the ( ) between residents and non-residents of a country over a given period of time.

A.trade balance B.foreign exchange receipts and payments C.Balance of money D.economic transaction

2. In the balance of payments, the debit records what?

A.The increase in assets and the increase in liabilities B.The increase in assets and the decrease in liabilities C.The decrease in assets and the increase in liabilities D.The decrease in assets and the decrease in liabilities

3. What is the most basic and important item in a country's BOP statement?

A.current account B.current transfer C.net errors and omissions D.official reserve

4. What is the most important item in the current account?

A.goods B.service C.income D.current transfer

5. In which account of the BOP statement is the grant of economic assistance between governments included?

A.secondary income B.capital account C.official reserve account D.income item

6. What is an artificial account in the BOP statement?

A.current account B.capital and financial account C.official reserve account D.net errors and omissions account

7. Which of the following is not a service item under the current item in the BOP statement

A.transportation B.travel C.communication D.goods purchased at ports by various means of transport

8. In theory, what is an imbalance in the balance of payments

A.compensatory transaction B.autonomous transaction C.accommodating transaction D.others

9. Under which of the following circumstances should a country maintain a high level of foreign exchange reserves?

A.foreign trade dependence is about 5% B.a fixed exchange rate system C.debt service ratio is close to 5% D.having a central bank independent of the finance ministry

10. What is the largest share of total international reserve assets today?

A.gold reserve B.SDR C.foreign exchange reserve D.ordinary drawing rights

11. Which of the following is called paper gold ?

A.foreign exchange reserve B.foreign exchange reserve C.ordinary drawing rights D.SDR

12. Which of the following is not an international reserve?

A.foreign exchange reserves held by commercial banks B.gold reserves held by central banks C.member states' reserve positions at the IMF D.foreign currency assets held by central banks

13. The more developed financial markets are, ____ international reserves governments keep. The higher the opportunity cost of holding reserves, _____international reserves the government holds.

A.the morethe less B.the morethe more C.the lessthe less D.the lessthe more

14. Which of the following statements is false?

A.tier 1 reserves are the most liquid but the least profitable B.countries generally choose corporate bonds and equities as reserve assets C.countries with balance of payments deficits need to keep a larger proportion of primary reserve assets in their reserves D.diversification of reserve currencies is a trend for a country

15. Which of the following statements is false?

A.the SDR is based on a weighted average of the currencies of 16 countries B.the IMF calculates the real interest rate of the SDR based on the composite market rate C.the SDR was originally issued as a supplement to existing reserve assets D.the IMF reviews the basket of currencies in the SDR every 3 years

16. Which of the following transactions would contribute to a U.S. current account surplus? ( )

A.Boeing barters a $100 million plane to Mexico in exchange for $100 million worth of hotel services on the Mexican coast. B.The United states borrows $100 million long-term from Saudi Arabia to buy $100 million of Saudi oil this year. C.The United States sells a $100 million jet to Turkey,and Turkey pays by transferring the $100 million from its bank account to the U.S.seller. D.A British investor buys $100 million of IBM bonds from the previous U.S. owner of these bonds, and the British buyer pays by transferring the $100 million from his bank account to the previous U.S. owner.