Question 1

A trade surplus means:

Accepted Answer

A) the country has positive net savings, which it lends abroad. 
B) the country has negative net savings, which it lends abroad. 
C) the country has positive net savings, which it borrows from abroad. 
D) the country has negative net savings, which it borrows from abroad. 
A) the country has positive net savings, which it lends abroad. 
B) the country has negative net savings, which it lends abroad. 
C) the country has positive net savings, which it borrows from abroad. 
D) the country has negative net savings, which it borrows from abroad. A

Question 2

Domestic currency depreciation will:

Accepted Answer

A) help domestic firms that export and hurt domestic firms that import. 
B) help domestic firms that import. 
C) hurt domestic firms that export and help domestic firms that import. 
D) hurt domestic firms that export. 
A) help domestic firms that export and hurt domestic firms that import. 
B) help domestic firms that import. 
C) hurt domestic firms that export and help domestic firms that import. 
D) hurt domestic firms that export. A

Question 3

A decrease in the supply of dollars on the foreign exchange market, all else equal, will result in:

Accepted Answer

A) appreciation of the U.S. dollar and depreciation of the foreign currency. 
B) appreciation of the U.S. dollar and appreciation of the foreign currency. 
C) depreciation of the U.S. dollar and depreciation of the foreign currency. 
D) depreciation of the U.S. dollar and appreciation of the foreign currency. 
A) appreciation of the U.S. dollar and depreciation of the foreign currency. 
B) appreciation of the U.S. dollar and appreciation of the foreign currency. 
C) depreciation of the U.S. dollar and depreciation of the foreign currency. 
D) depreciation of the U.S. dollar and appreciation of the foreign currency. A

Question 4

Capital inflows occur if:

Accepted Answer

A) domestic interest rates are higher than foreign interest rates. 
B) domestic interest rates are lower than foreign interest rates. 
C) domestic and foreign interest rates are the same. 
D) none of the above. 
A) domestic interest rates are higher than foreign interest rates. 
B) domestic interest rates are lower than foreign interest rates. 
C) domestic and foreign interest rates are the same. 
D) none of the above.

Question 5

When a country's export spending exceeds import spending, the country is experiencing a:

Accepted Answer

A) trade deficit. 
B) trade surplus. 
C) budget deficit. 
D) none of the above. 
A) trade deficit. 
B) trade surplus. 
C) budget deficit. 
D) none of the above.

Question 6

Under a fixed exchange rate system, a balance of payments deficit may:

Accepted Answer

A) decrease the country's money supply if there is a non-sterilized central bank intervention. 
B) decrease the country's money supply if there is a sterilized central bank intervention. 
C) increase the country's money supply if there is a non-sterilized central bank intervention. 
D) increase the country's money supply if there is a sterilized central bank intervention. 
A) decrease the country's money supply if there is a non-sterilized central bank intervention. 
B) decrease the country's money supply if there is a sterilized central bank intervention. 
C) increase the country's money supply if there is a non-sterilized central bank intervention. 
D) increase the country's money supply if there is a sterilized central bank intervention.

Question 7

When it became known in 1997 that the Thai government had insufficient foreign exchange reserves to maintain the exchange rate, how did currency speculators respond? What policy did the IMF suggest?

Accepted Answer

Currency speculators began massive selli

Question 8

In 2003, China's control of the value of the yuan became an economic and political issue for the U.S.because:

Accepted Answer

A) increased U.S. exports to China. 
B) decreased U.S. exports to China. 
C) increased China imports from the U.S. 
D) none of the above. 
A) increased U.S. exports to China. 
B) decreased U.S. exports to China. 
C) increased China imports from the U.S. 
D) none of the above.

Question 9

Equilibrium in the foreign exchange market implies equilibrium in the balance of payments.

Accepted Answer

A) True 
 B)False

Question 10

When a country's import spending exceeds export spending, the country is experiencing a:

Accepted Answer

A) trade deficit. 
B) trade surplus. 
C) budget deficit. 
D) none of the above. 
A) trade deficit. 
B) trade surplus. 
C) budget deficit. 
D) none of the above.

Question 11

In February 2002, the euro/dollar exchange rate was 1.20, and in May 2002, the euro/dollar exchange rate was 1.10.What happened to the exchange rate during this period?

Accepted Answer

A) Euro appreciated against the dollar. 
B) Euro depreciated against the dollar. 
C) Dollar appreciated against the euro. 
D) Both B and C. 
A) Euro appreciated against the dollar. 
B) Euro depreciated against the dollar. 
C) Dollar appreciated against the euro. 
D) Both B and C.

Question 12

In the foreign exchange market, a balance of payments deficit is represented by:

Accepted Answer

A) excess supply of dollars. 
B) excess demand for dollars. 
C) equilibrium in the foreign exchange market. 
D) none of the above. 
A) excess supply of dollars. 
B) excess demand for dollars. 
C) equilibrium in the foreign exchange market. 
D) none of the above.

Question 13

Under a flexible exchange rate system, if the quantity supplied of dollars is greater than the quantity demanded of dollars, there is a:

Accepted Answer

A) balance of payments deficit and the dollar would depreciate. 
B) balance of payments surplus and the dollar would depreciate. 
C) balance of payments deficit and the dollar would appreciate. 
D) balance of payments surplus and the dollar would appreciate. 
A) balance of payments deficit and the dollar would depreciate. 
B) balance of payments surplus and the dollar would depreciate. 
C) balance of payments deficit and the dollar would appreciate. 
D) balance of payments surplus and the dollar would appreciate.

Question 14

An index of the weighted exchange value of the U.S.dollar versus the currencies of a broad group of major U.S.trading partners is called the trade-weighted dollar.

Accepted Answer

A) True 
 B)False

Question 15

The major factor contributing to the appreciation of the dollar between 1995 to 2000 was:

Accepted Answer

A) decrease in capital inflows. 
B) increase in capital inflows. 
C) slow GDP growth in the U.S. 
D) none of the above. 
A) decrease in capital inflows. 
B) increase in capital inflows. 
C) slow GDP growth in the U.S. 
D) none of the above.

Question 16

A measure of the change in the stock of real and financial assets held by a country's residents in a foreign country and by foreigners in the given country is called the:

Accepted Answer

A) current account. 
B) financial account. 
C) national income product account. 
D) none of the above. 
A) current account. 
B) financial account. 
C) national income product account. 
D) none of the above.

Question 17

The difference between interest income or receipts earned on investments in the rest of the world by the residents of a given country and the payments to foreigners on investments they have made in a given country is called:

Accepted Answer

A) unilateral transfers. 
B) net investment income. 
C) capital expenditures. 
D) none of the above. 
A) unilateral transfers. 
B) net investment income. 
C) capital expenditures. 
D) none of the above.

Question 18

The exchange rate is determined by the interaction of the supply and demand for currencies in which exchange rate system is:

Accepted Answer

A) fixed. 
B) flexible. 
C) all of the above. 
D) none of the above. 
A) fixed. 
B) flexible. 
C) all of the above. 
D) none of the above.

Question 19

In the foreign exchange market, U.S.residents wishing to purchase foreign exports or foreign real and financial assets must:

Accepted Answer

A) demand U.S. dollars by supplying foreign currency. 
B) demand U.S. dollars by supplying U.S. dollars. 
C) supply U.S. dollars by demanding foreign currency. 
D) none of the above. 
A) demand U.S. dollars by supplying foreign currency. 
B) demand U.S. dollars by supplying U.S. dollars. 
C) supply U.S. dollars by demanding foreign currency. 
D) none of the above.

Question 20

A fixed exchange rate system where central banks buy and sell gold to keep exchange rates at a given level is called the:

Accepted Answer

A) fixed standard. 
B) flexible standard. 
C) fiat standard. 
D) gold standard. 
A) fixed standard. 
B) flexible standard. 
C) fiat standard. 
D) gold standard.

A trade surplus means:

Domestic currency depreciation will:

A decrease in the supply of dollars on the foreign exchange market, all else equal, will result in:

Capital inflows occur if:

When a country's export spending exceeds import spending, the country is experiencing a:

Under a fixed exchange rate system, a balance of payments deficit may:

When it became known in 1997 that the Thai government had insufficient foreign exchange reserves to maintain the exchange rate, how did currency speculators respond? What policy did the IMF suggest?

In 2003, China's control of the value of the yuan became an economic and political issue for the U.S.because:

Equilibrium in the foreign exchange market implies equilibrium in the balance of payments.

When a country's import spending exceeds export spending, the country is experiencing a:

In February 2002, the euro/dollar exchange rate was 1.20, and in May 2002, the euro/dollar exchange rate was 1.10.What happened to the exchange rate during this period?

In the foreign exchange market, a balance of payments deficit is represented by:

Under a flexible exchange rate system, if the quantity supplied of dollars is greater than the quantity demanded of dollars, there is a:

An index of the weighted exchange value of the U.S.dollar versus the currencies of a broad group of major U.S.trading partners is called the trade-weighted dollar.

The major factor contributing to the appreciation of the dollar between 1995 to 2000 was:

A measure of the change in the stock of real and financial assets held by a country's residents in a foreign country and by foreigners in the given country is called the:

The difference between interest income or receipts earned on investments in the rest of the world by the residents of a given country and the payments to foreigners on investments they have made in a given country is called:

The exchange rate is determined by the interaction of the supply and demand for currencies in which exchange rate system is:

In the foreign exchange market, U.S.residents wishing to purchase foreign exports or foreign real and financial assets must:

A fixed exchange rate system where central banks buy and sell gold to keep exchange rates at a given level is called the:

Managers and Economics

Demand, Supply, and Equilibrium Prices

Demand Elasticities

Techniques for Understanding Consumer Demand and Behavior

Production and Cost Analysis in the Short Run

Production and Cost Analysis in the Long Run

Market Structure: Perfect Competition

Market Structure: Monopoly and Monopolistic Competition

Market Structure: Oligopoly

Pricing Strategies for the Firm

Measuring Macroeconomic Activity

Spending by Individuals, Firms, and Governments on Real Goods and Services

The Role of Money in the Macro Economy

The Aggregate Model of the Macro Economy

Combining Micro and Macro Analysis for Managerial Decision Making

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Exam 15: International and Balance of Payments Issues in the Macro Economy

A trade surplus means:

Domestic currency depreciation will:

A decrease in the supply of dollars on the foreign exchange market, all else equal, will result in:

Capital inflows occur if:

When a country's export spending exceeds import spending, the country is experiencing a:

Under a fixed exchange rate system, a balance of payments deficit may:

When it became known in 1997 that the Thai government had insufficient foreign exchange reserves to maintain the exchange rate, how did currency speculators respond? What policy did the IMF suggest?

In 2003, China's control of the value of the yuan became an economic and political issue for the U.S.because:

Equilibrium in the foreign exchange market implies equilibrium in the balance of payments.

When a country's import spending exceeds export spending, the country is experiencing a:

In February 2002, the euro/dollar exchange rate was 1.20, and in May 2002, the euro/dollar exchange rate was 1.10.What happened to the exchange rate during this period?

In the foreign exchange market, a balance of payments deficit is represented by:

Under a flexible exchange rate system, if the quantity supplied of dollars is greater than the quantity demanded of dollars, there is a:

An index of the weighted exchange value of the U.S.dollar versus the currencies of a broad group of major U.S.trading partners is called the trade-weighted dollar.

The major factor contributing to the appreciation of the dollar between 1995 to 2000 was:

A measure of the change in the stock of real and financial assets held by a country's residents in a foreign country and by foreigners in the given country is called the:

The difference between interest income or receipts earned on investments in the rest of the world by the residents of a given country and the payments to foreigners on investments they have made in a given country is called:

The exchange rate is determined by the interaction of the supply and demand for currencies in which exchange rate system is:

In the foreign exchange market, U.S.residents wishing to purchase foreign exports or foreign real and financial assets must:

A fixed exchange rate system where central banks buy and sell gold to keep exchange rates at a given level is called the:

Managers and Economics

Demand, Supply, and Equilibrium Prices

Demand Elasticities

Techniques for Understanding Consumer Demand and Behavior

Production and Cost Analysis in the Short Run

Production and Cost Analysis in the Long Run

Market Structure: Perfect Competition

Market Structure: Monopoly and Monopolistic Competition

Market Structure: Oligopoly

Pricing Strategies for the Firm

Measuring Macroeconomic Activity

Spending by Individuals, Firms, and Governments on Real Goods and Services

The Role of Money in the Macro Economy

The Aggregate Model of the Macro Economy

Combining Micro and Macro Analysis for Managerial Decision Making

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