BUSINESS FINANCE TEST

Jun 18th, 2015
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1. In a Swan diagram, if an economy is situated below (to the right) of the external balance (EE) curve, there is a balance of payments ________ , and, if the economy is situated above (to the right) of the internal balance (YY) curve, there is ________ .a. deficit; recession or unemployment b. deficit; inflation* c. surplus; recession or unemployment

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MULTIPLE-CHOICE QUESTIONSNB: Clearly indicate which alternative you think is correct. 1. In a Swan diagram, if an economy is situated below (to the right) of the external balance (EE) curve, there is a balance of payments ________ , and, if the economy is situated above (to the right) of the internal balance (YY) curve, there is ________ .a. deficit; recession or unemploymentb. deficit; inflation*c. surplus; recession or unemploymentd. surplus; inflation 2. Points below the internal balance line YY of the Swan diagram indicatea. a balance of payments deficitb. a balance of payments surplusc. unemployment*d. inflation3. The Reserve Bank buying of Australian dollars on the foreign exchange market is recorded in the BOPA asa. a credit item in the current accountb. a debit item in the current accountc. a debit item in the capital accountd. a credit item in the capital account*4. If, under the Gold Standard, the par value of the franc in terms of the US dollar is $0.20, and if it costs $0.01 to move one francs worth of gold between the two countries, then the gold export point from the US is at ____________, and the gold import point into the US is at _____________. a. $0.20 = 1 franc; $0.20 = 1 francb. $0.19 = 1 franc; $0.21 = 1 francc. $0.21 = 1 franc; $0.19 = 1 franc*d. $0.22 = 1 franc; $0.21 = 1 franc5. The J-curve effect occurs whena. the trade balance improves sharply following revaluati

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