Question 1

In the case of Thailand in 1997, the Thai government was running a large:

Accepted Answer

A) current account surplus, requiring capital inflows from abroad. 
B) current account deficit, requiring capital inflows from abroad. 
C) current account surplus, requiring capital outflows. 
D) current account deficit, requiring capital outflows. 
A) current account surplus, requiring capital inflows from abroad. 
B) current account deficit, requiring capital inflows from abroad. 
C) current account surplus, requiring capital outflows. 
D) current account deficit, requiring capital outflows.

Question 2

Holding everything else constant, a country's exports will decrease if the:

Accepted Answer

A) country's currency appreciates. 
B) country's currency depreciates. 
C) country's currency is revalued. 
D) none of the above. 
A) country's currency appreciates. 
B) country's currency depreciates. 
C) country's currency is revalued. 
D) none of the above.

Question 3

The trade balance must equal the level of private and public saving in the country.

Accepted Answer

A) True 
 B)False

Question 4

Imports are:

Accepted Answer

A) positively related to the level of domestic income and negatively related to the exchange rate. 
B) positively related to the level of domestic income and positively related to the exchange rate. 
C) negatively related to the level of domestic income and negatively related to the exchange rate. 
D) negatively related to the level of domestic income and positively related to the exchange rate. 
A) positively related to the level of domestic income and negatively related to the exchange rate. 
B) positively related to the level of domestic income and positively related to the exchange rate. 
C) negatively related to the level of domestic income and negatively related to the exchange rate. 
D) negatively related to the level of domestic income and positively related to the exchange rate.

Question 5

Imports are:

Accepted Answer

A) positively related to income in the rest of the world and currency appreciation. 
B) positively related to income in the rest of the world and currency depreciation. 
C) positively related to domestic income and currency appreciation. 
D) positively related to domestic income and currency depreciation. 
A) positively related to income in the rest of the world and currency appreciation. 
B) positively related to income in the rest of the world and currency depreciation. 
C) positively related to domestic income and currency appreciation. 
D) positively related to domestic income and currency depreciation.

Question 6

In the foreign exchange market, the quantity supplied of dollars is 300 whereas the quantity demanded of dollars is 500 results in a:

Accepted Answer

A) balance of payments surplus of 200. 
B) balance of payments deficit of 200. 
C) balance of payments surplus of -200. 
D) balance of payments deficit of -200. 
A) balance of payments surplus of 200. 
B) balance of payments deficit of 200. 
C) balance of payments surplus of -200. 
D) balance of payments deficit of -200.

Question 7

Under a flexible exchange rate system, if the quantity supplied of dollars is less 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 8

In the foreign exchange market, a balance of payments surplus 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 9

Exports are:

Accepted Answer

A) positively related to income in the rest of the world and currency appreciation. 
B) positively related to income in the rest of the world and currency depreciation. 
C) positively related to domestic income and currency appreciation. 
D) positively related to domestic income and currency depreciation. 
A) positively related to income in the rest of the world and currency appreciation. 
B) positively related to income in the rest of the world and currency depreciation. 
C) positively related to domestic income and currency appreciation. 
D) positively related to domestic income and currency depreciation.

Question 10

In an open economy, total income is the sum of exports and imports.

Accepted Answer

A) True 
 B)False

Question 11

A decrease in the demand for 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.

Question 12

Exports are positively related to domestic income and negatively related to the exchange rate.

Accepted Answer

A) True 
 B)False

Question 13

The U.S.imports Japanese cars with a domestic price of 5,000,000 yen and the yen/dollar exchange rate is 120 on January 1, 2003.On January 1, 2004 the yen/dollar exchange rate is 125.What is the dollar price of the cars on January 1, 2003? What is the dollar price of the cars on January 1, 2004?

Accepted Answer

January 1, 2003: 5,000,000 yen

Question 14

What is the difference between a sterilized and non-sterilized central bank intervention in the foreign exchange market?

Accepted Answer

A sterilized central bank inte

Question 15

Briefly explain the behavior of the Federal Reserve considering a balance of payments disequilibria within a fixed exchange rate system.

Accepted Answer

If there were a balance of payments defi

Question 16

Under a fixed exchange rate system, to prevent the depreciation of the dollar as a result of a balance of payments deficit, the Fed will increase the demand for dollars by supplying a foreign currency from its reserve assets.

Accepted Answer

A) True 
 B)False

Question 17

A trade surplus exists if export spending is less than import spending.

Accepted Answer

A) True 
 B)False

Question 18

The weak euro in 1999-2000 put upward pressure on inflation in Europe by increasing the price of imported goods.

Accepted Answer

A) True 
 B)False

Question 19

The Bretton Woods conference in 1944 established the gold standard, which was abandoned in 1971.

Accepted Answer

A) True 
 B)False

Question 20

An increase in the demand for 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.

In the case of Thailand in 1997, the Thai government was running a large:

Holding everything else constant, a country's exports will decrease if the:

The trade balance must equal the level of private and public saving in the country.

Imports are:

Imports are:

In the foreign exchange market, the quantity supplied of dollars is 300 whereas the quantity demanded of dollars is 500 results in a:

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

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

Exports are:

In an open economy, total income is the sum of exports and imports.

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

Exports are positively related to domestic income and negatively related to the exchange rate.

The U.S.imports Japanese cars with a domestic price of 5,000,000 yen and the yen/dollar exchange rate is 120 on January 1, 2003.On January 1, 2004 the yen/dollar exchange rate is 125.What is the dollar price of the cars on January 1, 2003? What is the dollar price of the cars on January 1, 2004?

What is the difference between a sterilized and non-sterilized central bank intervention in the foreign exchange market?

Briefly explain the behavior of the Federal Reserve considering a balance of payments disequilibria within a fixed exchange rate system.

Under a fixed exchange rate system, to prevent the depreciation of the dollar as a result of a balance of payments deficit, the Fed will increase the demand for dollars by supplying a foreign currency from its reserve assets.

A trade surplus exists if export spending is less than import spending.

The weak euro in 1999-2000 put upward pressure on inflation in Europe by increasing the price of imported goods.

The Bretton Woods conference in 1944 established the gold standard, which was abandoned in 1971.

An increase in the demand for dollars on the foreign exchange market, all else equal, will result in:

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

In the case of Thailand in 1997, the Thai government was running a large:

Holding everything else constant, a country's exports will decrease if the:

The trade balance must equal the level of private and public saving in the country.

Imports are:

Imports are:

In the foreign exchange market, the quantity supplied of dollars is 300 whereas the quantity demanded of dollars is 500 results in a:

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

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

Exports are:

In an open economy, total income is the sum of exports and imports.

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

Exports are positively related to domestic income and negatively related to the exchange rate.

The U.S.imports Japanese cars with a domestic price of 5,000,000 yen and the yen/dollar exchange rate is 120 on January 1, 2003.On January 1, 2004 the yen/dollar exchange rate is 125.What is the dollar price of the cars on January 1, 2003? What is the dollar price of the cars on January 1, 2004?

What is the difference between a sterilized and non-sterilized central bank intervention in the foreign exchange market?

Briefly explain the behavior of the Federal Reserve considering a balance of payments disequilibria within a fixed exchange rate system.

Under a fixed exchange rate system, to prevent the depreciation of the dollar as a result of a balance of payments deficit, the Fed will increase the demand for dollars by supplying a foreign currency from its reserve assets.

A trade surplus exists if export spending is less than import spending.

The weak euro in 1999-2000 put upward pressure on inflation in Europe by increasing the price of imported goods.

The Bretton Woods conference in 1944 established the gold standard, which was abandoned in 1971.

An increase in the demand for dollars on the foreign exchange market, all else equal, will result in:

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

Filters