Question 1

During the 1980s, fiscal deficits in Latin America averaged nearly _____ percent.

Accepted Answer

A)  1 
B)  2 
C)  4 
D)  6 
E)  8 
A)  1 
B)  2 
C)  4 
D)  6 
E)  8 C

Question 2

The beginning of the inflationary process in Latin America was:

Accepted Answer

A)  G > T. 
B)  an increase in R. 
C)  an increase in 
D)  an increase in M 
E)  a decline in V. 
A)  G > T. 
B)  an increase in R. 
C)  an increase in 
D)  an increase in M 
E)  a decline in V. A

Question 3

Which of the following is the equation of exchange?

Accepted Answer

A)  B = Cp + R 
B)  M = B * 1/r 
C)  MV = PQ 
D)  Px/Pm 
E)  none of the above 
A)  B = Cp + R 
B)  M = B * 1/r 
C)  MV = PQ 
D)  Px/Pm 
E)  none of the above C

Question 4

High inflation is related to:

Accepted Answer

A)  R. 
B)  B. 
C)  M. 
D)  all of the above 
E)  none of the above 
A)  R. 
B)  B. 
C)  M. 
D)  all of the above 
E)  none of the above

Question 5

What fiscal policy would be appropriate to prevent an economy from slipping into a recession?

Accepted Answer

A)  higher taxes 
B)  lower government spending 
C)  IMF austerity program 
D)  lower taxes 
E)  less governmental social programs 
A)  higher taxes 
B)  lower government spending 
C)  IMF austerity program 
D)  lower taxes 
E)  less governmental social programs

Question 6

The equation of exchange shows that changes in M can:

Accepted Answer

A)  change V only. 
B)  change P only. 
C)  change either P or Q. 
D)  never cause inflation. 
E)  only cause deflation. 
A)  change V only. 
B)  change P only. 
C)  change either P or Q. 
D)  never cause inflation. 
E)  only cause deflation.

Question 7

If a government runs a budget deficit and cannot borrow, the deficit translates into an increase in the monetary base. Explain why this is true.

Accepted Answer

When a government runs a budget deficit

Question 8

The sum of cash in the hands of the public and demand deposits in an economy is known as:

Accepted Answer

A)  potential real GDP 
B)  money supply 
C)  monetary base 
D)  aggregate supply 
E)  money multiplier 
A)  potential real GDP 
B)  money supply 
C)  monetary base 
D)  aggregate supply 
E)  money multiplier

Question 9

An appropriate fiscal policy means that at Yp:

Accepted Answer

A) G T. C) G = T. D) X > M. E) X < M. A) G T. C) G = T. D) X > M. E) X < M.

Question 10

How is a fiscal deficit related to changes in the monetary base and the money supply? Next use this to describe inflation in Latin America in terms of the equation of exchange.

Accepted Answer

A fiscal deficit is related to changes i

Question 11

Which of these is the equation for the money supply?

Accepted Answer

A)  B = Cp + R 
B)  MV = PQ 
C)  Y = C + G + I + (X-M) 
D)  Ms = Cp + D 
E)  none of the above 
A)  B = Cp + R 
B)  MV = PQ 
C)  Y = C + G + I + (X-M) 
D)  Ms = Cp + D 
E)  none of the above

Question 12

The average fiscal deficit as a percentage of GDP in Latin America peaked at _____ percent in the 1980s.

Accepted Answer

A)  1 
B)  2 
C)  7 
D)  12 
E)  15 
A)  1 
B)  2 
C)  7 
D)  12 
E)  15

Question 13

In any given economy, who is responsible for managing the money supply?

Accepted Answer

A)  president 
B)  World Bank 
C)  IMF 
D)  central bank 
E)  none of the above 
A)  president 
B)  World Bank 
C)  IMF 
D)  central bank 
E)  none of the above

Question 14

Economic populism focuses on:

Accepted Answer

A)  economic outcomes in the long run. 
B)  price stabilization. 
C)  long-run economic growth. 
D)  short-run economic outcomes. 
E)  none of the above 
A)  economic outcomes in the long run. 
B)  price stabilization. 
C)  long-run economic growth. 
D)  short-run economic outcomes. 
E)  none of the above

Question 15

Show how a budget deficit of 5 percent of GDP could produce a large expansion in the supply of money.

Accepted Answer

A budget deficit occurs when a governmen

Question 16

A rightward movement of AD would tend to:

Accepted Answer

A)  increase P. 
B)  decrease P. 
C)  decrease Y. 
D)  increase V. 
E)  none of the above 
A)  increase P. 
B)  decrease P. 
C)  decrease Y. 
D)  increase V. 
E)  none of the above

Question 17

If B changed by 50 billion pesos and r was equal to .10, then the money supply would change by _____ pesos.

Accepted Answer

A)  50 billion 
B)  100 billion 
C)  150 billion 
D)  500 billion 
E)  1 trillion 
A)  50 billion 
B)  100 billion 
C)  150 billion 
D)  500 billion 
E)  1 trillion

Question 18

A fiscal deficit financed by printing money increases:

Accepted Answer

A)  B. 
B)  Ms. 
C)  r. 
D)  a and b 
E)  b and c 
A)  B. 
B)  Ms. 
C)  r. 
D)  a and b 
E)  b and c

Question 19

Describe how a relatively small government budget deficit could cause serious inflation.

Accepted Answer

A relatively small government budget def

Question 20

Economic populism is associated with:

Accepted Answer

A)  inflation. 
B)  low economic growth. 
C)  high economic growth. 
D)  price stability. 
E)  a and b 
A)  inflation. 
B)  low economic growth. 
C)  high economic growth. 
D)  price stability. 
E)  a and b

During the 1980s, fiscal deficits in Latin America averaged nearly _____ percent.

The beginning of the inflationary process in Latin America was:

Which of the following is the equation of exchange?

High inflation is related to:

What fiscal policy would be appropriate to prevent an economy from slipping into a recession?

The equation of exchange shows that changes in M can:

If a government runs a budget deficit and cannot borrow, the deficit translates into an increase in the monetary base. Explain why this is true.

The sum of cash in the hands of the public and demand deposits in an economy is known as:

An appropriate fiscal policy means that at Y_p:

How is a fiscal deficit related to changes in the monetary base and the money supply? Next use this to describe inflation in Latin America in terms of the equation of exchange.

Which of these is the equation for the money supply?

The average fiscal deficit as a percentage of GDP in Latin America peaked at _____ percent in the 1980s.

In any given economy, who is responsible for managing the money supply?

Economic populism focuses on:

Show how a budget deficit of 5 percent of GDP could produce a large expansion in the supply of money.

A rightward movement of AD would tend to:

If B changed by 50 billion pesos and r was equal to .10, then the money supply would change by _____ pesos.

A fiscal deficit financed by printing money increases:

Describe how a relatively small government budget deficit could cause serious inflation.

Economic populism is associated with:

Latin American Economic History

Economic Growth and Latin America

Limits to Growth in Latin America

Growth and the Environment in Latin America

Latin American and Primary Commodities

Import Substitution in Latin America

Latin American Trade Policy

Exchange-Rate Policy

Financing Current-Account Deficits

Macroeconomic Stability

Poverty Inequality

Economic Policy Debates in Latin America

Filters

Exam 10: Macroeconomic Policy in Latin America

During the 1980s, fiscal deficits in Latin America averaged nearly _____ percent.

The beginning of the inflationary process in Latin America was:

Which of the following is the equation of exchange?

High inflation is related to:

What fiscal policy would be appropriate to prevent an economy from slipping into a recession?

The equation of exchange shows that changes in M can:

If a government runs a budget deficit and cannot borrow, the deficit translates into an increase in the monetary base. Explain why this is true.

The sum of cash in the hands of the public and demand deposits in an economy is known as:

An appropriate fiscal policy means that at Yp:

How is a fiscal deficit related to changes in the monetary base and the money supply? Next use this to describe inflation in Latin America in terms of the equation of exchange.

Which of these is the equation for the money supply?

The average fiscal deficit as a percentage of GDP in Latin America peaked at _____ percent in the 1980s.

In any given economy, who is responsible for managing the money supply?

Economic populism focuses on:

Show how a budget deficit of 5 percent of GDP could produce a large expansion in the supply of money.

A rightward movement of AD would tend to:

If B changed by 50 billion pesos and r was equal to .10, then the money supply would change by _____ pesos.

A fiscal deficit financed by printing money increases:

Describe how a relatively small government budget deficit could cause serious inflation.

Economic populism is associated with:

Latin American Economic History

Economic Growth and Latin America

Limits to Growth in Latin America

Growth and the Environment in Latin America

Latin American and Primary Commodities

Import Substitution in Latin America

Latin American Trade Policy

Exchange-Rate Policy

Financing Current-Account Deficits

Macroeconomic Stability

Poverty Inequality

Economic Policy Debates in Latin America

Filters

An appropriate fiscal policy means that at Y_p: