All other things remaining the same, a large increase in the net number of Mexican immigrant workers in the United States from Mexico causes:
a. U.S. GNP to be greater than the U.S. GDP.
b. U.S. GNP to be less than the U.S. GDP.
c. U.S. gross private domestic investment to rise.
d. U.S. GNP to be greater than the U.S. GDP because U.S. gross private domestic investment rises
Question 2 - Is it correct to say that if the total balance of payments does not equal zero, then the reserves account will automatically adjust to ensure it equals zero.
a. Yes.
b. No.
c. The answer is maybe because it always depends on the circumstances.
Question 3 - Which of the following relationships is correct?
a. GDP = GNP + Net foreign income
b. GNP = GDP + Net foreign income
c. GDP = Consumption + Net foreign income
d. GDP = GNP + Balance of payments
e. GDP = GNP adjusted for the foreign exchange rate
Question 4 - Which of the following is not included in Nation A's reserves account in the balance of payments?
a. Changes in official gold holdings.
b. The stock official (i.e., central bank) holdings of foreign currencies.
c. Increases in borrowing rights at the International Monetary Fund.
d. All of the above are included in reserves.
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