Here is the key and some comments:
1-D (see above), 2-C, 3-A, 4-D, 5-A, 6-D, 7-A,
8-C, 9-D, 10-C, 11-C, 12-A, 13-D,
14-D, 15*-C, 16-C, 17-D, 18-B,
19-A, 20-D, 21-B, 22-D, 23-D, 24-D,
25-D, 26-D, 27-B, 28-A, 29-A, 30-B, 31-C,
32-C, 33-B, 34-D, 35-A, 36-C.
*On problem 15 I should have edited that question to refer to "financial account" rather than "capital account". The international finance literature is moving (some people faster than others) from calling the "bottom half" of the International Transactions the capital account (often referred to as KA) to financial account (FA). I try to use FA since there is an accounting line on the international transactions called "capital account". That line (line 39) has a specific and very narrow definition. I apologize for any confusion. I will try to make sure I consistently use the term "financial account" and when I wish to net out or subtract official transactions, I will make sure it is very clear.
In problems 19-23, it refers to a closed economy. Since all of these refer to savings (national, private, and public), it really does not matter if the economy is open or closed. Each of these savings definitions hold whether the economy is closed (no trade) or open (engages in trade).
If you have any questions or comments, please email me or send me a text message to my AIM account (screen name: CinciDood). I'm not likely to read comments on this post.
I will try to be online for a while this evening.
Remember, I'm giving you a copy of the International Transactions table with the test. It will be your only available "cheat sheet". I really don't think of it so much as a "cheating help" but there is just a high level of detail of some concepts or transactions. If you understand the table you should be able to thoughtfully formulate responses.
Good luck
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update comment:
Ok, I have received a few questions about 14-17. I will confess that this question came from a test bank from a text I used to use. These problems come from old tests. (That's all I got for ya, thanks for understanding.)
Here's what it all hinges on:
Re: above where I explain the "capital account" and the "financial account"
Well, given the text from which I pulled this problem, on problem 15, the "capital account" (which I said read as "financial account") is really asking for the full balance. So if all financial account transactions, including official, it should sum to 15 leaving us with a statistical discrepancy of -5.
We should be able to answer 16 from merely lines 9 and 10. If that sum is +5, then it would imply BoP = current account + non official financial account transactions + statistical discrepancy < 0 (or equals -5).
-10 + 10 - 5 < 0, where the +5 on the right hand side would equal lines 9+10.
And adding OR (+5) gives us a BOP =0
My wording of 15 should be more precise. It would make sense if it said "The balance on the financial account (official and non official)" it would = 15.
This is totally my bad. I am sorry for the confusion. I will try my best to present such a problem with more clarity. Thanks to all who inquired early as opposed to first thing in the morning so that I could clarify.
Alternatively, i could just say the answer to 15 would be B. ;-)
J
where 15 is the full financial account, of which
