Exam 18: Balance of Payments II: Output, Exchange Rates, and Macroeconomic Policies in the Short Run

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Unlike in the long-run model, in the short-run Keynesian model, we make two critical assumptions: that firms adjust production depending on _, and that _.

(Multiple Choice)

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Question 101

The total demand line will shift whenever:

(Multiple Choice)

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Question 102

Trade dollarization refers to:

(Multiple Choice)

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Question 103

Traders operate on the principle that the the value of the nominal exchange rate (E), the it is to purchase foreign currency, and the _ its return measured in the domestic currency.

(Multiple Choice)

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Question 104

Even though it may seem that nations have a wide variety of policy options to stabilize their economies, there are a number of issues to be considered and overcome. Which of the following is NOT an issue confronting policy makers?

(Multiple Choice)

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Question 105

What is the real exchange rate?

(Multiple Choice)

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Question 106

Suppose that the United States does of its trade with Canada, with the United Kingdom, and with Mexico. If the dollar real exchange rate rises by 10% with Canada, rises by 20% for the United Kingdom, and falls by 10% for Mexico, what is the percentage change in the real effective exchange rate?

(Multiple Choice)

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Question 107

Explain why the IS curve slopes down.

(Essay)

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Question 108

When exchange rates are fixed, a temporary expansion in the money supply will:

(Multiple Choice)

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Question 109

If a basket of goods costs $100 in the United States and 300 pesos in Mexico, and if the exchange rate is $1 = 5 pesos, then the dollar price of the basket of goods in Mexico is:

(Multiple Choice)

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Question 110

When income levels in the home nation increase, what is the effect on the home TB?

(Multiple Choice)

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Question 111

If a proportion of traded goods (such as oil) are priced in a foreign currency, the real exchange rate becomes:

(Multiple Choice)

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Question 112

What is the zero lower bound and why is it important?

(Short Answer)

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Question 113

An increase in the home country's income will result in a(n) _ in the home country trade balance, and an increase in foreign income will result in a(n) _ in the home country trade balance.

(Multiple Choice)

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Question 114

In 2009, there was an unlikely boom in British cross-Channel grocery deliveries to France because of:

(Multiple Choice)

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Question 115

If the marginal propensity to consume for a nation is 0.8, it means:

(Multiple Choice)

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Question 116

Normally, a firm's borrowing cost is the expected real interest rate, which takes expected inflation into account. With price stickiness, however, the firm will consider only:

(Multiple Choice)

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Question 117

To simplify the analysis of demand shocks in an open, two-economy, short-run model, we assume all of the following, EXCEPT:

(Multiple Choice)

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Question 118

Whenever U.S. government spending increases, thereby increasing the demand for real balances and the rate of interest, the currency will appreciate and there is a potential for:

(Multiple Choice)

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Question 119

Suppose firms become more optimistic about future profitability. What will this shock do to Y, i, E, and TB?

(Short Answer)

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Question 120

Showing 101 - 120 of 153

Exam 18: Balance of Payments II: Output, Exchange Rates, and Macroeconomic Policies in the Short Run

Unlike in the long-run model, in the short-run Keynesian model, we make two critical assumptions: that firms adjust production depending on _______, and that _______.

The total demand line will shift whenever:

Trade dollarization refers to:

Traders operate on the principle that the ______ the value of the nominal exchange rate (E), the ______ it is to purchase foreign currency, and the _____ its return measured in the domestic currency.

Even though it may seem that nations have a wide variety of policy options to stabilize their economies, there are a number of issues to be considered and overcome. Which of the following is NOT an issue confronting policy makers?

What is the real exchange rate?

Suppose that the United States does of its trade with Canada, with the United Kingdom, and with Mexico. If the dollar real exchange rate rises by 10% with Canada, rises by 20% for the United Kingdom, and falls by 10% for Mexico, what is the percentage change in the real effective exchange rate?

Explain why the IS curve slopes down.

When exchange rates are fixed, a temporary expansion in the money supply will:

If a basket of goods costs $100 in the United States and 300 pesos in Mexico, and if the exchange rate is $1 = 5 pesos, then the dollar price of the basket of goods in Mexico is:

When income levels in the home nation increase, what is the effect on the home TB?

If a proportion of traded goods (such as oil) are priced in a foreign currency, the real exchange rate becomes:

What is the zero lower bound and why is it important?

An increase in the home country's income will result in a(n) _____ in the home country trade balance, and an increase in foreign income will result in a(n) _____ in the home country trade balance.

In 2009, there was an unlikely boom in British cross-Channel grocery deliveries to France because of:

If the marginal propensity to consume for a nation is 0.8, it means:

Normally, a firm's borrowing cost is the expected real interest rate, which takes expected inflation into account. With price stickiness, however, the firm will consider only:

To simplify the analysis of demand shocks in an open, two-economy, short-run model, we assume all of the following, EXCEPT:

Whenever U.S. government spending increases, thereby increasing the demand for real balances and the rate of interest, the currency will appreciate and there is a potential for:

Suppose firms become more optimistic about future profitability. What will this shock do to Y, i, E, and TB?

Trade in the Global Economy

Trade and Technology: The Ricardian Model

Gains and Losses From Trade in the Specific-Factors Model

Trade and Resources: the Heckscher-Ohlin Model

Movement of Labor and Capital Between Countries

Increasing Returns to Scale and Monopolistic Competition

Offshoring of Goods and Services

Import Tariffs and Quotas Under Perfect Competition

Import Tariffs and Quotas Under Imperfect Competition

Export Subsidies in Agriculture and High-Technology Industries

International Agreements: Trade, Labor, and the Environment

The Global Macroeconomy

Introduction to Exchange Rates and the Foreign Exchange Market

Exchange Rates I: the Monetary Approach in the Long Run

Exchange Rates II: the Asset Approach in the Short Run

National and International Accounts: Income, Wealth, and the Balance of Payments

Balance of Payments I: the Gains From Financial Globalization

Fixed Versus Floating: International Monetary Experience

Exchange Rate Crises: How Pegs Work and How They Break

The Euro

Topics in International Macroeconomics

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Unlike in the long-run model, in the short-run Keynesian model, we make two critical assumptions: that firms adjust production depending on _, and that _.

Traders operate on the principle that the the value of the nominal exchange rate (E), the it is to purchase foreign currency, and the _ its return measured in the domestic currency.

An increase in the home country's income will result in a(n) _ in the home country trade balance, and an increase in foreign income will result in a(n) _ in the home country trade balance.