Question 1

Figure 36-5
​  
-Which of the graphs in Figure 36-5 are consistent with an appreciation of the U.S.dollar caused by an increase in U.S.interest rates?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 2

Figure 36-8
​  
-Which of the graphs in Figure 36-8 illustrates the AD-AS shifts associated with an expansionary monetary policy?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 3

In the spring of 2002, the United States imposed tariffs on imported steel to protect the jobs of American steel workers and protect the production of the American steel industry.Why might this policy not work to increase overall employment in the United States?

Accepted Answer

This type of trade policy is commonly ca

Question 4

Did the large U.S.budget deficits in the 1980s "crowd out" investment as some economists had predicted?

Accepted Answer

A) Yes, investment dropped as predicted. 
B) Yes, although investment did not fall nearly as much as some had feared. 
C) No, investment was not crowded out, but net exports dropped. 
D) No, no crowding out at all occurred. 
A) Yes, investment dropped as predicted. 
B) Yes, although investment did not fall nearly as much as some had feared. 
C) No, investment was not crowded out, but net exports dropped. 
D) No, no crowding out at all occurred.

Question 5

How does a budget deficit lead to a trade deficit?

Accepted Answer

A) The trade deficit triggers higher interest rates, which increase the budget deficit. 
B) The budget deficit leads to higher interest rates and exchange rates, which shrink net exports. 
C) The trade deficit causes lower interest rates, which leads to economic recession and a budget deficit. 
D) The budget deficit causes lower exchange rates, which decrease net exports. 
A) The trade deficit triggers higher interest rates, which increase the budget deficit. 
B) The budget deficit leads to higher interest rates and exchange rates, which shrink net exports. 
C) The trade deficit causes lower interest rates, which leads to economic recession and a budget deficit. 
D) The budget deficit causes lower exchange rates, which decrease net exports.

Question 6

The reason that higher interest rates reduce aggregate demand in an open economy with capital flows is that investment

Accepted Answer

A) increases generated by higher interest rates are offset by net export decreases. 
B) decreases generated by higher interest rates are coupled with net export decreases. 
C) decreases generated by higher interest rates are offset by net export increases. 
D) increases generated by higher interest rates are coupled with net export increases. 
A) increases generated by higher interest rates are offset by net export decreases. 
B) decreases generated by higher interest rates are coupled with net export decreases. 
C) decreases generated by higher interest rates are offset by net export increases. 
D) increases generated by higher interest rates are coupled with net export increases.

Question 7

If the United States increased its budget deficit, and it is at or near full employment, the most likely effect is to crowd

Accepted Answer

A) in investment and crowd out net exports. 
B) out investment and crowd in net exports. 
C) in investment and crowd in net exports. 
D) out investment and crowd out net exports. 
A) in investment and crowd out net exports. 
B) out investment and crowd in net exports. 
C) in investment and crowd in net exports. 
D) out investment and crowd out net exports.

Question 8

A closed economy is one that does not trade with other nations in either goods or assets.

Accepted Answer

A) True 
 B)False

Question 9

If the demand effect dominates during a currency depreciation, then

Accepted Answer

A) real GDP should fall. 
B) real GDP should increase. 
C) the price level should fall. 
D) net exports should decrease. 
A) real GDP should fall. 
B) real GDP should increase. 
C) the price level should fall. 
D) net exports should decrease.

Question 10

Figure 36-2  
-Which of the following explains the movements in Figure 36-2?

Accepted Answer

A) An increase in U.S.imports 
B) A decrease in U.S.exports 
C) An increase in U.S.exports 
D) A decrease in U.S.net exports 
A) An increase in U.S.imports 
B) A decrease in U.S.exports 
C) An increase in U.S.exports 
D) A decrease in U.S.net exports

Question 11

A rise in interest rates tends to contract the economy by appreciating the currency and reducing net exports.

Accepted Answer

A) True 
 B)False

Question 12

In the mid-1990s, real interest rates fell in the United States.This was the result of budget deficit

Accepted Answer

A) increases and tighter monetary policy. 
B) increases and looser monetary policy. 
C) reductions and looser monetary policy. 
D) reductions and tighter monetary policy. 
A) increases and tighter monetary policy. 
B) increases and looser monetary policy. 
C) reductions and looser monetary policy. 
D) reductions and tighter monetary policy.

Question 13

Explain how and why economic events in the United States affected the economies of Thailand, South Korea, and Indonesia and vice-versa.

Accepted Answer

Thailand, South Korea, and Indonesia fix

Question 14

An appreciation of the Japanese yen relative to the U.S.dollar will

Accepted Answer

A) increase aggregate demand in the United States. 
B) increase aggregate supply in the United States. 
C) increase aggregate demand in Japan. 
D) decrease aggregate supply in Japan. 
A) increase aggregate demand in the United States. 
B) increase aggregate supply in the United States. 
C) increase aggregate demand in Japan. 
D) decrease aggregate supply in Japan.

Question 15

Figure 36-9
​   ​
-In Figure 36-9, the C + I + G + (X − IM)1 line is flatter than the C + I + G + (X − IM)0 line because the

Accepted Answer

A) (X − IM)1 line indicates that net exports decline as GDP rises. 
B) (X − IM)1 line indicates that net exports rise as GDP rises. 
C) multiplier is greater for the (X − IM)1 line. 
D) (X − IM)1 line indicates that tariffs, quotas, and other trade barriers are keeping net exports below their full potential. 
A) (X − IM)1 line indicates that net exports decline as GDP rises. 
B) (X − IM)1 line indicates that net exports rise as GDP rises. 
C) multiplier is greater for the (X − IM)1 line. 
D) (X − IM)1 line indicates that tariffs, quotas, and other trade barriers are keeping net exports below their full potential.

Exam 36: Exchange Rates and the Macroeconomy

Figure 36-5 ​ -Which of the graphs in Figure 36-5 are consistent with an appreciation of the U.S.dollar caused by an increase in U.S.interest rates?

Figure 36-8 ​ -Which of the graphs in Figure 36-8 illustrates the AD-AS shifts associated with an expansionary monetary policy?

In the spring of 2002, the United States imposed tariffs on imported steel to protect the jobs of American steel workers and protect the production of the American steel industry.Why might this policy not work to increase overall employment in the United States?

Did the large U.S.budget deficits in the 1980s "crowd out" investment as some economists had predicted?

How does a budget deficit lead to a trade deficit?

The reason that higher interest rates reduce aggregate demand in an open economy with capital flows is that investment

If the United States increased its budget deficit, and it is at or near full employment, the most likely effect is to crowd

A closed economy is one that does not trade with other nations in either goods or assets.

If the demand effect dominates during a currency depreciation, then

Figure 36-2 -Which of the following explains the movements in Figure 36-2?

A rise in interest rates tends to contract the economy by appreciating the currency and reducing net exports.

In the mid-1990s, real interest rates fell in the United States.This was the result of budget deficit

Explain how and why economic events in the United States affected the economies of Thailand, South Korea, and Indonesia and vice-versa.

An appreciation of the Japanese yen relative to the U.S.dollar will

Figure 36-9 ​ ​ -In Figure 36-9, the C + I + G + (X − IM)1 line is flatter than the C + I + G + (X − IM)0 line because the

What Is Economics

The Economony: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Contemporary Issues in the Useconomy

Filters

Figure 36-5 -Which of the graphs in Figure 36-5 are consistent with an appreciation of the U.S.dollar caused by an increase in U.S.interest rates?

Figure 36-8 -Which of the graphs in Figure 36-8 illustrates the AD-AS shifts associated with an expansionary monetary policy?

Figure 36-9 -In Figure 36-9, the C + I + G + (X − IM)1 line is flatter than the C + I + G + (X − IM)0 line because the