Chapter 2

Multiple Choice
Identify the choice that best completes the statement or answers the question.
Recently, the UK experienced an annual balance of trade representing a
1. __________.
a. large surplus (exceeding 100
c. level of zero
billion)
b. small surplus
d. deficit
D
ANSWER:
0/1
POINTS:
An increase in the current account deficit will place _______ pressure on the home
2. currency value, other things equal.
a. upward
b. downward
c. no
d. upward or downward (depending on the size of the deficit)
B
ANSWER:
0/1
POINTS:
Which of the following would likely have the least direct influence on a country's
3. current account?
a. inflation.
b. national income.
c. exchange rates.
d. tariffs.
e. a tax on income earned from foreign stocks.
E
ANSWER:
0/1
POINTS:
The North American Free Trade Agreement (NAFTA) increased restrictions on:
4. a. trade between Canada and Mexico.
b. trade between Canada and the U.S.
c. direct foreign investment in Mexico by U.S. firms.
d. none of the above.
D
ANSWER:
0/1
POINTS: