Marketing
QU E S T I O N S F O R R E V I E W
1. What is meant by the balance of payments? In
what way is the balance of payments a summary
statement? What is meant by an international trans-
action? How is a resident of a nation defined? In
what way is the time element involved in measuring
a nation’s balance of payments?
2. What is a credit transaction? a debit transaction?
Which are the broad categories of international
transactions classified as credits? as debits?
3. What is double-entry bookkeeping? Why does
double-entry bookkeeping usually involve an entry
called statistical discrepancy? How does such a sta-
tistical discrepancy arise?
4. What is meant by the current account? Did the
United States have a deficit or a surplus in the cur-
rent account in 2011? What was its size?
5. What was the size of the net financial outflows
(including U.S. official reserve assets) in 2011?
What was the size of the net financial inflows to
the United States in 2011?
6. Why is the classification of international financial
flows into short term and long term not stressed
anymore today as it was in the past?
7. How was the statistical discrepancy of (−) $89 bil-
lion for 2011 arrived at? By how much did U.S. official reserve assets change in 2011? By how
much did foreign official reserve assets change in
2011?
8. Which items does the financial account in-
clude? What is meant by the autonomous transac-
tions? accommodating transactions? Which items
does the official reserve account include?
9. How is an official settlements deficit or surplus
measured? What was the size of the U.S. balance
of payments in 2011?
10. What are the most serious pitfalls to avoid in ana-
lyzing a nation’s balance of payments or statements
of international transactions?
11. What were the cause and effect of the large U.S.
trade imbalance during the postwar period?
12. What is meant by the international investment
position of a nation, or its balance of interna-
tional indebtedness? What is its relationship to the
nation’s balance of payments?
13. What is the most important use of the statement of
the international investment position of a nation?
14. What are the benefits and risks of the