Question 1

When Pam from Pennsylvania buys stock in Ford Motor Co. ,she is contributing to:

Accepted Answer

A)  domestic investment in the U.S.
B)  capital outflow for the U.S.
C)  capital inflow for the U.S.
D)  foreign direct investment for the U.S.E) None of the above
F) A) and B)

Question 2

The contagion that spread to South Korea,Indonesia,and other countries during the Asian financial crisis was:

Accepted Answer

A)  speculative attacks forcing them to abandon their fixed exchange rates.
B)  competitive devaluation that led to plummeting exchange rates for all.
C)  competitive revaluation that led to severe overvaluation and collapse for all but South Korea.
D)  None of these statements is true.E) None of the above
F) All of the above

Question 3

The trade in goods,services,and capital comprises:

Accepted Answer

A)  trillions of dollars around the world.
B)  billions of dollars around the world.
C)  quadrillions of dollars around the world.
D)  millions of dollars around the world.E) None of the above
F) B) and D)

Question 4

When the Fed decides to enact expansionary monetary policy,the supply of loanable funds:

Accepted Answer

A)  increases,while the demand for loanable funds decreases.
B)  decreases,while the demand for loanable funds increases.
C)  and the demand for loanable funds both decrease.
D)  and the demand for loanable funds both increase.E) A) and B)
F) None of the above

Question 5

A country that typically runs a trade surplus is:

Accepted Answer

A)  China.
B)  Germany.
C)  Japan.
D)  All of these countries run trade surpluses.E) B) and C)
F) C) and D)

Question 6

Using a fixed exchange rate to undervalue your currency:

Accepted Answer

A)  will increase your exports.
B)  will encourage savings in countries other than your own.
C)  makes imports very expensive for your citizens.
D)  All of these statements are true.E) B) and C)
F) A) and D)

Question 7

If Wes in Wisconsin buys $200 worth of stock in Toshiba,and the Japanese use the $200 to buy a wheel of cheese from Wes,then the U.S.:

Accepted Answer

A)  net exports and net capital outflow are both zero.
B)  net exports and net capital outflow both equal $200.
C)  net exports is zero and net capital outflow is $200.
D)  net exports equals $200 and net capital outflow is zero.E) C) and D)
F) A) and C)

Question 8

Which of the following is likely to decrease the supply of U.S.dollars in the forex market?

Accepted Answer

A)  If foreign interest rates are low relative to U.S.interest rates
B)  If investors' confidence in foreign economies increases
C)  If U.S.consumers prefer foreign goods to U.S.goods
D)  All of these will increase the supply of U.S.dollars.E) A) and B)
F) A) and C)

Question 9

If Allan lives in Boston and decides to buy a pair of hockey skates from Canada for $100,and the Canadian he bought them from buys a baseball hat and jersey for $100 from Boston,then the U.S.:

Accepted Answer

A)  net exports and net capital outflow are both zero.
B)  net exports and net capital outflow both equal -$100.
C)  net exports is zero and net capital outflow is -$100.
D)  net exports equals -$100 and net capital outflow is zero.E) All of the above
F) B) and D)

Question 10

In the market for loanable funds in an open economy,the supply of loanable funds:

Accepted Answer

A)  can come from domestic savers or savers abroad.
B)  is equal to national savings.
C)  is equal to private savings.
D)  is equal to public savings.E) All of the above
F) A) and B)

Question 11

When Sam in San Francisco buys stock in Fuji Film,he is contributing to:

Accepted Answer

A)  capital investment for Japan.
B)  capital inflow for the U.S.
C)  domestic investment in the U.S.
D)  None of these statements is true.E) All of the above
F) A) and D)

Question 12

Which of the following countries fell victim to contagion during the Asian financial crisis?

Accepted Answer

A)  Indonesia
B)  Malaysia
C)  The Philippines
D)  All of these countries were hurt during the crisis.E) A) and D)
F) A) and C)

Question 13

If the cost of a typical basket of goods in the U.S.is $100 and in Mexico it is 800 pesos,and the nominal exchange rate is 25 pesos per dollar,what is the real exchange rate?

Accepted Answer

A)  0.33.
B)  1.33.
C)  1.50.
D)  3.13.E) A) and B)
F) A) and C)

Question 14

When the U.S.government runs a deficit,the resulting higher interest rate:

Accepted Answer

A)  reduces firms' desire to invest,and "crowds out" domestic investment.
B)  increases firms' desire to invest,but "crowds out" domestic investment.
C)  reduces foreigners' willingness to invest in the U.S. ,but still "crowds out" domestic investment.
D)  increases foreigners' willingness to invest in the U.S. ,which "crowds out" domestic investment.E) B) and C)
F) None of the above

Question 15

A country that has a trade surplus:

Accepted Answer

A)  imports more than it exports.
B)  has a negative trade balance.
C)  sells more goods abroad than it buys from abroad.
D)  All of these statements are true.E) All of the above
F) C) and D)

Question 16

NCO plus domestic investment forms the:

Accepted Answer

A)  demand for loanable funds in an open economy.
B)  demand for loanable funds in a closed economy.
C)  supply of loanable funds in an open economy.
D)  supply of loanable funds in a closed economy.E) A) and B)
F) All of the above

Question 17

When the value of a currency decreases relative to other currencies,we say that a currency experiences:

Accepted Answer

A)  exchange-rate appreciation.
B)  exchange-rate depreciation.
C)  interest-rate appreciation.
D)  interest-rate depreciation.E) C) and D)
F) B) and D)

Question 18

The amount of money in an economy that people can invest is equal to:

Accepted Answer

A)  their income.
B)  the value of their output.
C)  the value of consumption after gains from trade have been made.
D)  their savings.E) B) and D)
F) C) and D)

Question 19

Overall,the U.S.government has borrowed:

Accepted Answer

A)  more than $1.6 trillion from Chinese investors through selling U.S.Treasury securities.
B)  roughly $1.9 billion from Chinese investors through selling U.S.Treasury securities.
C)  about $273 billion from Mexican investors through selling U.S.Treasury securities.
D)  approximately $365 billion from investors from the UK through selling U.S.Treasury securities.E) B) and C)
F) None of the above

Question 20

China imports ___________ from the U.S.compared to how many goods the U.S.imports from China.

Accepted Answer

A)  less
B)  more
C)  about the same
D)  practically nothingE) None of the above
F) All of the above

Exam 34: Open-Market Macroeconomics

A country that has a trade surplus:

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Using a fixed exchange rate to undervalue your currency:

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When the value of a currency decreases relative to other currencies,we say that a currency experiences:

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Overall,the U.S.government has borrowed:

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If the cost of a typical basket of goods in the U.S.is $100 and in Mexico it is 800 pesos,and the nominal exchange rate is 25 pesos per dollar,what is the real exchange rate?

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When the Fed decides to enact expansionary monetary policy,the supply of loanable funds:

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When Sam in San Francisco buys stock in Fuji Film,he is contributing to:

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The amount of money in an economy that people can invest is equal to:

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The contagion that spread to South Korea,Indonesia,and other countries during the Asian financial crisis was:

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China imports ___________ from the U.S.compared to how many goods the U.S.imports from China.

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The trade in goods,services,and capital comprises:

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A country that typically runs a trade surplus is:

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Which of the following is likely to decrease the supply of U.S.dollars in the forex market?

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Which of the following countries fell victim to contagion during the Asian financial crisis?

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When the U.S.government runs a deficit,the resulting higher interest rate:

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When Pam from Pennsylvania buys stock in Ford Motor Co. ,she is contributing to:

Correct AnswerverifiedShow Answer

If Wes in Wisconsin buys $200 worth of stock in Toshiba,and the Japanese use the $200 to buy a wheel of cheese from Wes,then the U.S.:

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In the market for loanable funds in an open economy,the supply of loanable funds:

Correct AnswerverifiedShow Answer

NCO plus domestic investment forms the:

Correct AnswerverifiedShow Answer

If Allan lives in Boston and decides to buy a pair of hockey skates from Canada for $100,and the Canadian he bought them from buys a baseball hat and jersey for $100 from Boston,then the U.S.:

Correct AnswerverifiedShow Answer

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