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

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The open-economy IS curve slopes down because any change in the foreign or home interest rate will inversely affect demand, along with a secondary effect from a change in:

(Multiple Choice)

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Question 121

A short-run open-economy model with demand shocks can analyze the effect on _____ if output prices and factor prices are sticky.

(Multiple Choice)

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Question 122

In the Keynesian model, when is the economy in short-run equilibrium?

(Multiple Choice)

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Question 123

The LM curve shows that, with a fixed supply of money, as GDP rises, the demand for money will and the rate of interest will .

(Multiple Choice)

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Question 124

Consider an economy with flexible exchange rates. If there are high levels of inflation in the economy, then the appropriate monetary policy would be to the money supply, which will cause the curve to shift __.

(Multiple Choice)

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Question 125

If taxes go up and all else remains equal, then consumption should:

(Multiple Choice)

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Question 126

If the central bank in a foreign country increases its interest rate, then the IS curve of the domestic economy will:

(Multiple Choice)

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Question 127

If output falls, which of the following could be an explanation?

(Multiple Choice)

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Question 128

The direction of change in the trade balance is uncertain because expansionary monetary policy may exert forces in the opposite direction. What are they?

(Multiple Choice)

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Question 129

The greater the MPC is, the ______ the slope of the demand curve.

(Multiple Choice)

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Question 130

It can be shown using the IS-LM-FX model that a temporary expansion in the supply of money is effective in:

(Multiple Choice)

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Question 131

Calculate the relative price of a basket of goods sold in the United States and Japan in terms of dollars if the yen/$ exchange rate = 90. The basket costs $100 in the United States and ¥9,000 in Japan. The relative price is:

(Multiple Choice)

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Question 132

What are the ultimate impacts of temporary fiscal contraction under fixed exchange rates on Y, i, E, and the TB? Briefly explain.

(Essay)

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Question 133

Investment occurs when:

(Multiple Choice)

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Question 134

Consider the IS-LM curves for an economy with flexible exchange rates. An increase in the foreign income will result in the:

(Multiple Choice)

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Question 135

A government policy deemed to be "temporary" indicates:

(Multiple Choice)

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Question 136

As the level of real GDP rises, with a fixed quantity of money, something must "give." Describe the process of deriving the LM curve whereby a rise in GDP is associated with an increase in the rate of interest, resulting in an upward-sloping LM curve.

(Essay)

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Question 137

At a given nominal rate of interest, when spending is equal to output and there is uncovered interest parity, we have:

(Multiple Choice)

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Question 138

The short-run model makes use of the ______, which assumes that private consumption expenditure is sensitive to changes in current income.

(Multiple Choice)

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Question 139

If there is an increase in government spending, then, ceteris paribus, the IS curve:

(Multiple Choice)

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Question 140

Showing 121 - 140 of 153

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

The open-economy IS curve slopes down because any change in the foreign or home interest rate will inversely affect demand, along with a secondary effect from a change in:

A short-run open-economy model with demand shocks can analyze the effect on _____ if output prices and factor prices are sticky.

In the Keynesian model, when is the economy in short-run equilibrium?

The LM curve shows that, with a fixed supply of money, as GDP rises, the demand for money will ____ and the rate of interest will ____.

Consider an economy with flexible exchange rates. If there are high levels of inflation in the economy, then the appropriate monetary policy would be to ________ the money supply, which will cause the ______ curve to shift ________.

If taxes go up and all else remains equal, then consumption should:

If the central bank in a foreign country increases its interest rate, then the IS curve of the domestic economy will:

If output falls, which of the following could be an explanation?

The direction of change in the trade balance is uncertain because expansionary monetary policy may exert forces in the opposite direction. What are they?

The greater the MPC is, the ______ the slope of the demand curve.

It can be shown using the IS-LM-FX model that a temporary expansion in the supply of money is effective in:

Calculate the relative price of a basket of goods sold in the United States and Japan in terms of dollars if the yen/$ exchange rate = 90. The basket costs $100 in the United States and ¥9,000 in Japan. The relative price is:

What are the ultimate impacts of temporary fiscal contraction under fixed exchange rates on Y, i, E, and the TB? Briefly explain.

Investment occurs when:

Consider the IS-LM curves for an economy with flexible exchange rates. An increase in the foreign income will result in the:

A government policy deemed to be "temporary" indicates:

As the level of real GDP rises, with a fixed quantity of money, something must "give." Describe the process of deriving the LM curve whereby a rise in GDP is associated with an increase in the rate of interest, resulting in an upward-sloping LM curve.

At a given nominal rate of interest, when spending is equal to output and there is uncovered interest parity, we have:

The short-run model makes use of the ______, which assumes that private consumption expenditure is sensitive to changes in current income.

If there is an increase in government spending, then, ceteris paribus, the IS curve:

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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The LM curve shows that, with a fixed supply of money, as GDP rises, the demand for money will and the rate of interest will .

Consider an economy with flexible exchange rates. If there are high levels of inflation in the economy, then the appropriate monetary policy would be to the money supply, which will cause the curve to shift __.