ECONOMICS 353 (SECTION 1) L. Tesfatsion/Spring 01
EXERCISE SET 7: 5 POINTS TOTAL DUE: Tuesday, March 27, 9:30 A.M.
*IMPORTANT REMINDER: LATE ASSIGNMENTS CANNOT BE ACCEPTED -- NO EXCEPTIONS*
*NOTE:* Please FILL IN YOUR NAME, BIRTH DATE, AND ID (SOC SEC) No. on Side 1
of a RED bubble (answer) sheet and write "353 SECTION 1-EXERCISE SET 7" in
the top margin of Side 1. Use a #2 pencil to MARK YOUR ANSWERS on Side 1 of
the bubble sheet to the following five multiple choice questions:
1-1 In GDP accounting for the HC, ROW saving is defined to be ___________
minus ______________.
A. HC national saving; HC private saving
B. HC imports; HC exports
C. Total income received by the HC from ROW; HC imports
D D. Total income received by ROW from the HC; HC exports
2-1 As conventionally defined in GDP national income accounting in the
United States, the _________ keeps track of __________________ .
A. capital account; net exports, net factor payments, and net transfers
B B. capital account; net trades in financial assets and existing real assets
C. current account; net trades in financial assets and existing real assets
D. current account; net official reserve transactions
3-1 Which of the items below would be directly entered as items in the U.S.
CURRENT account (CA):
A. Purchases by Cubans of cigars newly produced within the
borders of the U.S.
B. A Malaysian citizen's purchase of U.S. Treasury bonds
C. Interest payments received by U.S. holders of a German bond issue
D. Foreign aid to Zambia
E E. All but B
4-1 If the HC is running a current account DEFICIT, then HC national saving
_______ HC total investment and the HC is ___________ ROW.
A. is greater than; a net lender to
B. is greater than; a net borrower from
C. is less than; a net lender to
D D. is less than; a net borrower from
E. none of the above
5-1 Using the definitions for CA, KA, NKA, and BP introduced in the online
notes for Mishkin Chapter 19, a balance of payments EQUILIBRIUM for the HC
requires that the sum of _________ and ___________ equals _____________
A. CA; KA; 0
B B. CA; NKA; 0
C. CA; KA; BP
D. CA; NKA; BP
E. none of the above
