Question 1

The real exchange rate depends on the nominal exchange rate and on the price difference between two countries measured in the local currencies.

Accepted Answer

A) True 
 B)False

Question 2

If the law of one price holds, and a tonne of rice costs $25 in Australia and 4000 yen in Japan, then the nominal exchange rate is:

Accepted Answer

A)  160 yen/$ and $.10/ yen 
B)  1000 yen/$ and $1.00/ yen 
C)  400 yen/$ and $.25/ yen 
D)  160 yen/$ and $.01/ yen 
A)  160 yen/$ and $.10/ yen 
B)  1000 yen/$ and $1.00/ yen 
C)  400 yen/$ and $.25/ yen 
D)  160 yen/$ and $.01/ yen

Question 3

International trade has been much more significant for Australia than for many other nations.

Accepted Answer

A) True 
 B)False

Question 4

Saving in the Australian economy shows up as investment in the Australian economy or as the Australian net foreign investment.

Accepted Answer

A) True 
 B)False

Question 5

The real exchange rate is the:

Accepted Answer

A)  domestic price of goods 
B)  value of net exports 
C)  rate at which a person can trade the currency of one country for the currency of another 
D)  rate at which domestic goods are traded for foreign goods 
A)  domestic price of goods 
B)  value of net exports 
C)  rate at which a person can trade the currency of one country for the currency of another 
D)  rate at which domestic goods are traded for foreign goods

Question 6

Which of the following statements about the current account and the capital account is correct?

Accepted Answer

A)  The value of goods or services exported equals the value of the asset given up to pay for this import 
B)  The net value of the goods or services sold by a country and the net income it earns from overseas must equal the net value of the asset acquired 
C)  The international flow of goods and services and income, and the international flow of capital are two sides of the same coin 
D)  None of the above 
A)  The value of goods or services exported equals the value of the asset given up to pay for this import 
B)  The net value of the goods or services sold by a country and the net income it earns from overseas must equal the net value of the asset acquired 
C)  The international flow of goods and services and income, and the international flow of capital are two sides of the same coin 
D)  None of the above

Question 7

If each country specialises in producing goods and services in which it has a comparative advantage, international trade:

Accepted Answer

A)  can raise the standard of living in all trading countries 
B)  lowers the standard of living in all trading countries 
C)  leaves the standard of living unchanged 
D)  increases the political power of the trading countries 
A)  can raise the standard of living in all trading countries 
B)  lowers the standard of living in all trading countries 
C)  leaves the standard of living unchanged 
D)  increases the political power of the trading countries

Question 8

Factors that might influence a country's exports, imports and net exports include the cost of transporting goods from country to country, and government international trade policies.

Accepted Answer

A) True 
 B)False

Exam 31: Open-Economy Macroeconomics: Basic Concepts

The real exchange rate depends on the nominal exchange rate and on the price difference between two countries measured in the local currencies.

If the law of one price holds, and a tonne of rice costs $25 in Australia and 4000 yen in Japan, then the nominal exchange rate is:

International trade has been much more significant for Australia than for many other nations.

Saving in the Australian economy shows up as investment in the Australian economy or as the Australian net foreign investment.

The real exchange rate is the:

Which of the following statements about the current account and the capital account is correct?

If each country specialises in producing goods and services in which it has a comparative advantage, international trade:

Factors that might influence a country's exports, imports and net exports include the cost of transporting goods from country to country, and government international trade policies.

Ten Lessons From Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand and Government Policies

Consumers, Producers and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Business Strategy

Competition Policy

Monopolistic Competition

The Markets for the Factors of Production

Earnings, Unions and Discrimination

Income Inequity and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment and the Financial System

The Natural Rate of Unemployment

The Monetary System

Inflation: Its Causes and Costs

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters