Chapter 4 Workbook Answers

Multiple Choice Questions
1) Which of the following describes a trend in recent decades?
2) Which of the following best describes recent trends in the composition of Australia's exports?
3) Which of the following best describes the current account ?
4) What is the value of the net primary account?
5) For the hypothetical economy in the above table, what would be the effect of an $8 billion surge in agricultural exports?
6) How are foreign company dividends recorded on the balance of payments?
7) Which of the following is generally true of Australia's financial flows?
8) Which of the following would be recorded on the net secondary income account?
9) An Australian information technology company purchases the intellectual property rights to newly developed software from India. How is this purchase recorded on the balance of payments?
10) Which of the following would reduce Australia's CAD over time?
11) Net foreign liabilities are made up of which of the following?
12) Which of the following is most likely to cause movements in the terms of trade from year 1 to year 2?
13) Which statement is true?
14) Which of the following best describes foreign equity?
15) What is likely to impact on the balance of the current account if Australia's superannuation guarantee is increased?
16) Which of the following correctly describes the change between 2015 and 2016?
17) Which of the following would be classified as a portfolio investment inflow?
18) Which of the following best describes a debit on the balance of payments?
19) What is the balance on the KAFA?
20) What is the impact on Australia's net forgein liabilities if out net foreign debt rises by $30 billion and our net foreign equity rises by $15 billion?