Macroeconomics and Private Financial Account

Topics: Macroeconomics, Government spending, National accounts Pages: 2 (442 words) Published: April 8, 2014
Tutorial 1
Chapter 2: Macroeconomic accounts
Multiple choice questions
Question 1
Ignoring errors and omissions in the balance of payments accounts, if official interventions (Off) are positive, what may we conclude?
a. That at least one of the current account (CA) and the private financial account (FA) was a deficit.
b. That both the current account (CA) and the private financial account (FA) were a deficit.
c. That either the current account (CA) or the private financial account (FA) was a surplus.
d. That both the current account (CA) and the private financial account (FA) were in surplus.
Question 2
Which ONE of the following variables is a stock variable?
a. GDP.
b. Net external debt.
c. The government budget deficit.
d. A nation’s trade surplus.
Question 3
If the current account of the euro zone is in surplus by €38bn, its capital- and financial account is in surplus by €38bn, and errors and omissions are a negative €81bn, what has happened to foreign exchange reserves?

a. They have increased by €5bn.
b. They remain unchanged.
c. They have decreased by €5bn.
d. They have decreased by €38bn.
Question 4
In Borduria, consumption is 750, the government budget deficit is 20, total fiscal revenues equal 440, the current account is in surplus by 10, and total private saving equals 220. Which ONE of the following is true?

a. GDP is 1320.
b. GDP is 1260.
c. Net private saving is -50.
d. Net private saving is 30.
Question 5
In the circular flow of spending, which ONE of the following items does NOT constitute an increase of the flow of spending/income?
a. Government purchases of goods and services.
b. Business investment spending.
c. Spending on imported goods.
d. Government spending on transfers.

Question 6
Consider the following statements:
I. If there is a surplus in the current account, and private investment exceeds private savings, the tax revenues collected by the government must be higher than government expenditures....
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