Question 1: Dumping takes place when a firm:
a. Sells too much of a good in the foreign country.
b. Sells in a foreign country at prices which are below fair value.
c. Sells in its home market at prices which are below the average price charged by its competitors.
d. Sells in a foreign market at prices which are below the prices charged by firms based in the foreign market.
Use the given information in the table to answer questions (2)-(4):
Question 2: The balance on the current account is:
a .+100.
b. +200.
c. 0
d. –100.
e. –200.
Question 3: The balance on the capital account is:
a. +100
b. +200
c. 0
d. –100
e. –200
Question 4: If the information in the table is typical of current and capital account values over a long period, then it would be reasonable to infer that:
a. Net international investment position is negative.
b. Net international investment position is positive.
c. National savings are less than the domestic investment.
d. Government accounts are in deficit.
e. Current account balance is more than domestic investment.
Question 5: All else equivalent and given the current system of exchange rates, if the US enters a period of exceptionally strong growth:
a. Pressure on the dollar is to revalue.
b. Pressure on the dollar is to devalue.
c. Pressure on the dollar is to depreciate.
d. Pressure on the dollar is to appreciate.