true or false ?

1)When a currency is devalued, the immediate

impact may be an increase in a country's trade deficit. However, this situation tends to correct itself in 2 to 5 weeks.

2)The immediate impact of a devaluation of the domestic currency is to decrease the value of the spot exchange rate S$/fc.

3)One of the motivations for capital controls is to insulate an economy from foreign political risks

Multiple choice questions (only one answer is correct).

1)The balance of payments:

A) determines the eligibility of countries for IMF aid.

b)adds up the value of all assets and liabilities of a country on a specific date. C) records all international transactions for a country over a period of time. D) all of the above

2) A German tourist purchases a leather jacket while in Italy. Which of the following statements is true?

A) The leather purchase would be considered an import for the German BOP.

B) This transaction would be properly accounted for in the Current Account of the German BOP. C) The leather purchase is considered an import of a good, and thus, considered part of the German balance of trade as well.

D) All of these statements are true.