Exam 20: Macroeconomics in an Open Economy

Suppose that health experts discover that French red wine lowers cholesterol.How will this affect the demand and supply of dollars in exchange for euros? Illustrate with a graph and explain.Will the dollar appreciate or depreciate? _ _

(Essay)

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Question 61

The 'nominal exchange rate' is the

(Multiple Choice)

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Question 62

A country that imports a significant proportion of its consumer goods can avoid inflation by adopting a fixed exchange rate because it can avoid the price increases of that occur when the value of the domestic currency .

(Multiple Choice)

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Question 63

Both countries involved in an exchange rate peg must agree to the peg.

(True/False)

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Question 64

Explain what the 'financial account' measures. _ _

(Essay)

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Question 65

If the capital account is in surplus and the current account is zero,then the

(Multiple Choice)

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Question 66

What is a 'pegged exchange rate' and what are the advantages to a country of having a pegged exchange rate system? _ _

(Essay)

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Question 67

What is the 'real exchange rate' and how is it calculated? _ _

(Essay)

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Question 68

If the rate of inflation in Australia exceeds the rate of inflation in Great Britain,we would expect the Australian dollar to depreciate in value against the British pound.

(True/False)

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Question 69

Because of inflation,the prices of Australian goods are rising faster than prices of goods in Great Britain.If purchasing power parity holds,then

(Multiple Choice)

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Question 70

The Australian dollar was floated in ________.

(Multiple Choice)

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Question 71

In recent decades,Australia has incurred overall balance of payments deficits.

(True/False)

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Question 72

Show what will happen in the market for yen if Japan's central bank sells yen for dollars.Explain what will happen to Australia's current account,ceteris paribus,because of this action. _ _

(Essay)

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Question 73

A currency exchange rate system under which the currency is determined by demand and supply,and occasional government intervention is a

(Multiple Choice)

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Question 74

How is the impact of expansionary monetary policy different in an open economy to that in a closed economy? _ _

(Essay)

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Question 75

The International Monetary Fund was established during the Bretton Woods System to

(Multiple Choice)

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Question 76

Since the 1960s,Australia's interest repayments on foreign debt as a proportion of GDP has normally been between the range of

(Multiple Choice)

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Question 77

Suppose that the euro depreciates against the dollar.Assuming all other factors remain constant,the real exchange rate of euros to Australian dollars will ________.

(Multiple Choice)

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Question 78

Explain how a floating exchange rate can cause problems for countries that have a substantial number of foreign loans denominated in US dollars.How might a fixed exchange rate pegged to the US dollar help the country avoid these problems? _ _

(Essay)

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Question 79

What is the savings and investment equation? If S > I,then what is true of net foreign investment? Explain,using the savings and investment equation. _ _

(Essay)

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Question 80

Suppose that health experts discover that French red wine lowers cholesterol.How will this affect the demand and supply of dollars in exchange for euros? Illustrate with a graph and explain.Will the dollar appreciate or depreciate? _ _

The 'nominal exchange rate' is the

A country that imports a significant proportion of its consumer goods can avoid inflation by adopting a fixed exchange rate because it can avoid the price increases of that occur when the value of the domestic currency .

Both countries involved in an exchange rate peg must agree to the peg.

Explain what the 'financial account' measures. _ _

If the capital account is in surplus and the current account is zero,then the

What is a 'pegged exchange rate' and what are the advantages to a country of having a pegged exchange rate system? _ _

What is the 'real exchange rate' and how is it calculated? _ _

If the rate of inflation in Australia exceeds the rate of inflation in Great Britain,we would expect the Australian dollar to depreciate in value against the British pound.

Because of inflation,the prices of Australian goods are rising faster than prices of goods in Great Britain.If purchasing power parity holds,then

The Australian dollar was floated in ________.

In recent decades,Australia has incurred overall balance of payments deficits.

Show what will happen in the market for yen if Japan's central bank sells yen for dollars.Explain what will happen to Australia's current account,ceteris paribus,because of this action. _ _

A currency exchange rate system under which the currency is determined by demand and supply,and occasional government intervention is a

How is the impact of expansionary monetary policy different in an open economy to that in a closed economy? _ _

The International Monetary Fund was established during the Bretton Woods System to

Since the 1960s,Australia's interest repayments on foreign debt as a proportion of GDP has normally been between the range of

Suppose that the euro depreciates against the dollar.Assuming all other factors remain constant,the real exchange rate of euros to Australian dollars will ________.

Explain how a floating exchange rate can cause problems for countries that have a substantial number of foreign loans denominated in US dollars.How might a fixed exchange rate pegged to the US dollar help the country avoid these problems? _ _

What is the savings and investment equation? If S > I,then what is true of net foreign investment? Explain,using the savings and investment equation. _ _

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Gdp: Measuring Total Production, income and Economic Growth

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Filters

Exam 20: Macroeconomics in an Open Economy

The 'nominal exchange rate' is the

A country that imports a significant proportion of its consumer goods can avoid inflation by adopting a fixed exchange rate because it can avoid the price increases of ________ that occur when the value of the domestic currency ________.

Both countries involved in an exchange rate peg must agree to the peg.

Explain what the 'financial account' measures. _____________________________________________________________________________________________ _____________________________________________________________________________________________

If the capital account is in surplus and the current account is zero,then the

What is the 'real exchange rate' and how is it calculated? _____________________________________________________________________________________________ _____________________________________________________________________________________________

If the rate of inflation in Australia exceeds the rate of inflation in Great Britain,we would expect the Australian dollar to depreciate in value against the British pound.

Because of inflation,the prices of Australian goods are rising faster than prices of goods in Great Britain.If purchasing power parity holds,then

The Australian dollar was floated in ________.

In recent decades,Australia has incurred overall balance of payments deficits.

A currency exchange rate system under which the currency is determined by demand and supply,and occasional government intervention is a

How is the impact of expansionary monetary policy different in an open economy to that in a closed economy? _____________________________________________________________________________________________ _____________________________________________________________________________________________

The International Monetary Fund was established during the Bretton Woods System to

Since the 1960s,Australia's interest repayments on foreign debt as a proportion of GDP has normally been between the range of

Suppose that the euro depreciates against the dollar.Assuming all other factors remain constant,the real exchange rate of euros to Australian dollars will ________.

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Gdp: Measuring Total Production, income and Economic Growth

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Filters

A country that imports a significant proportion of its consumer goods can avoid inflation by adopting a fixed exchange rate because it can avoid the price increases of that occur when the value of the domestic currency .

Explain what the 'financial account' measures. _ _

What is the 'real exchange rate' and how is it calculated? _ _

How is the impact of expansionary monetary policy different in an open economy to that in a closed economy? _ _