The big balance of payments Christmas quiz

Question 1: Santa Claus, with all his cross-border gift-giving, may have a big impact on the balance of payments, but he does not set its rules. Which organisation is responsible for setting the rules for calculating the balance of payments? 

• a. Eurostat 
• b. The Bank for International Settlements
• c. The United Nations
• d. The International Monetary Fund
  
  

Question 2: Santa Claus works very hard to make sure Christmas is a time of joy, relaxation and reflection. Why do DNB staff also work hard in December to prepare the balance of payments?

• a. If the balance of payments tips out of balance at the end of the year, then this can pose problems when setting budgets for the coming year.
• b. Economists and policymakers need to have a reliable picture of transactions and financial relationships between the Netherlands and the rest of the world as soon as possible, with the underlying aim of identifying trends and vulnerabilities.
• c. Distinguishing the impact of the December economy (Christmas and other holidays) from the “normal” economy in other months helps to avoid drawing misleading conclusions.
• d. Having rapid access to the net asset position of the Netherlands contributes to the current debate on the distribution of wealth.
  
  

Question 3: When Santa Claus arrives at the Dutch border, he has 10 million presents in his sleigh. When his work in the Netherlands is done, he moves on to Belgium with only 1 million presents left. How many presents do we register in the goods account in the Netherlands?

• a. Nothing, because the presents are free.
• b. Imports of 10 million and exports of 10 million, equal to the presents entering and leaving the Netherlands.
• c. Imports of 9 million presents, the rest being in transit without transfer of beneficial ownership.
• d. Almost nothing, as goods are only registered if they have a unit value of more than €1000 (presents containing game consoles do not count, while expensive fatbikes given as gifts do count).
  
  

Question 4: It is said that Santa Claus lives at the North Pole. In that case, which of the following answers is not reflected in the North Pole’s balance of payments.

• a. The costs charged by “North Pole Inc.” to Santa for the rental of the sleigh.
• b. The costs incurred by Rudolph the injured reindeer (a resident of the North Pole) to have a broken leg put in a cast in the Netherlands after an unplanned altercation with a wolf in the countryside.
• c. A present ordered by Santa from a Dutch online shop.
• d. The extra Christmas cookies that Santa imports from Switzerland because the elves at the North Pole warehouse have eaten all the stock.
  
  

Question 5: To streamline the money flows involved in the distribution of Christmas presents, Santa has set up a multinational network of companies. This network includes also a number of holding companies in the Netherlands. The headquarters of this multinational, “Xmas is all around us Inc.”, is located in the jurisdiction that has the largest international investment position in the Netherlands. Which jurisdiction is this?   

• a. The North Pole
• b. The United States
• c. Luxembourg
• d. China
  
  

Question 6: Partly due to Santa’s growing influence on the Dutch economy, we have a positive current account balance, also known as a surplus. Why is there a lot of international attention on the Netherlands’ current account surplus? The North Pole Central Bank, which reports a structural deficit, is particularly interested in this topic...

• a. This means the Dutch economy is doing well. The higher the surplus, the better.

• b. A structural surplus of a country’s balance of payments is an indication that the data collected are inaccurate, and there is an unjustly difference between the components, for example the current account and the financial account.

• c. Especially when the net goods and services transactions have opposite signs, a surplus can point to a fast structural transformation of the economy.

• d. A structural large current account surplus (of more than 6% of gross domestic product) or a large deficit may be an indicator of potential macroeconomic imbalances in the euro area.

Question 7: Santa Claus delivers millions of presents worldwide every year. At DNB, we also know how to deal with big numbers. Approximately how many data points does the Dutch balance of payments contain to illustrate relationships between the Netherlands and foreign countries in a given quarter?

• a. 12,000 data points
• b. 51,000 data points
• c. 128,000 data points
• d. 260,000 data point