NYU International Economics - Final
Exam (Chapters 10-14) Questions &
Answers10
Balance of Payments - ANSWERS-Record of the economic transactions between the residents of
one country and the rest of the world.
Double Entry Accounting - ANSWERS-Arranging international transactions into a balance-of-
payments account that requires each transaction to be entered as a credit or debit.
Credit Transaction - ANSWERS-A receipt of a payment from foreigners
Debit Transaction - ANSWERS-One that leads to a payment to foreigners
Balance-of-payments structure - ANSWERS-Current Account
Merchandise trade balance
Capital and Financial Account
Private Sector Financial Transactions
Special Drawing Rights - ANSWERS-A new reserve asset created by the IMF as a supplement to
the existing reserves of member countries
Current Account Deficit - ANSWERS-Meaning that there is an excess of imports over exports
Current Account Surplus - ANSWERS-Meaning that there is an excess of exports over imports
, Foreign Exchange Market - ANSWERS-Organizational setting in which individuals, businesses,
governments, and banks buy and sell foreign currencies and other debt instruments.
Foreign Exchange Market's 3 Levels - ANSWERS-- Transactions between commercial banks and
commercial customers
- Domestic interbank market conducted through brokers
- Active trading in forex with banks overseas.
Types of Forex Transactions - ANSWERS-Spot, Forward, and Swap
Forex Spot Transactions - ANSWERS-Outright purchase or sale of a currency now, as in "on the
spot"
Forex Forward Transactions - ANSWERS-Receiving or paying an amount of foreign currency on a
specific date in the future
Forex Currency Swap - ANSWERS-Conversion of one currency to another at one point in time.
Interbank Trading - ANSWERS-- Retail transactions
- Wholesale transactions
Forex Bid Rate - ANSWERS-Price that the bank is willing to pay for a unit of foreign currency
Forex Offer Rate - ANSWERS-Price at which bank is willing to sell a unit of foreign currency
Forex Spread - ANSWERS-The difference between bid and offer rate
Exam (Chapters 10-14) Questions &
Answers10
Balance of Payments - ANSWERS-Record of the economic transactions between the residents of
one country and the rest of the world.
Double Entry Accounting - ANSWERS-Arranging international transactions into a balance-of-
payments account that requires each transaction to be entered as a credit or debit.
Credit Transaction - ANSWERS-A receipt of a payment from foreigners
Debit Transaction - ANSWERS-One that leads to a payment to foreigners
Balance-of-payments structure - ANSWERS-Current Account
Merchandise trade balance
Capital and Financial Account
Private Sector Financial Transactions
Special Drawing Rights - ANSWERS-A new reserve asset created by the IMF as a supplement to
the existing reserves of member countries
Current Account Deficit - ANSWERS-Meaning that there is an excess of imports over exports
Current Account Surplus - ANSWERS-Meaning that there is an excess of exports over imports
, Foreign Exchange Market - ANSWERS-Organizational setting in which individuals, businesses,
governments, and banks buy and sell foreign currencies and other debt instruments.
Foreign Exchange Market's 3 Levels - ANSWERS-- Transactions between commercial banks and
commercial customers
- Domestic interbank market conducted through brokers
- Active trading in forex with banks overseas.
Types of Forex Transactions - ANSWERS-Spot, Forward, and Swap
Forex Spot Transactions - ANSWERS-Outright purchase or sale of a currency now, as in "on the
spot"
Forex Forward Transactions - ANSWERS-Receiving or paying an amount of foreign currency on a
specific date in the future
Forex Currency Swap - ANSWERS-Conversion of one currency to another at one point in time.
Interbank Trading - ANSWERS-- Retail transactions
- Wholesale transactions
Forex Bid Rate - ANSWERS-Price that the bank is willing to pay for a unit of foreign currency
Forex Offer Rate - ANSWERS-Price at which bank is willing to sell a unit of foreign currency
Forex Spread - ANSWERS-The difference between bid and offer rate
