Question 1

Governments affect international financial relationships through their policy regimes. These might include:

Accepted Answer

A)  economic philosophies like liberalism and Marxism. 
B)  laws or regulations affecting investment, reserves, or credit. 
C)  larger sets of rules that define a general context to which specific laws or regulations conform. 
D)  very broad legal, social, political, and commercial structures that influence economic behavior. 
A)  economic philosophies like liberalism and Marxism. 
B)  laws or regulations affecting investment, reserves, or credit. 
C)  larger sets of rules that define a general context to which specific laws or regulations conform. 
D)  very broad legal, social, political, and commercial structures that influence economic behavior.

Question 2

Exchange rate behavior is:

Accepted Answer

A)  unimportant in determining income, prices, and flows of goods and services. 
B)  very important in determining income, prices, and flows of goods and services. 
C)  very predictable, steady, and not of interest to policy makers. 
D)  not subject to market forces, but is determined by international agreements. 
A)  unimportant in determining income, prices, and flows of goods and services. 
B)  very important in determining income, prices, and flows of goods and services. 
C)  very predictable, steady, and not of interest to policy makers. 
D)  not subject to market forces, but is determined by international agreements.

Question 3

Optimal policies and policy regimes generally:

Accepted Answer

A)  require standard approaches. 
B)  require different approaches in rich and poor countries. 
C)  have similar results in both rich and poor countries. 
D)  require the government to be authoritarian. 
A)  require standard approaches. 
B)  require different approaches in rich and poor countries. 
C)  have similar results in both rich and poor countries. 
D)  require the government to be authoritarian.

Question 4

A nation with a relatively high country risk factor would MOST likely have:

Accepted Answer

A)  stable exports and unstable imports. 
B)  low levels of external debt. 
C)  excessive levels of spending compared with its income and current account surpluses. 
D)  unstable exports, a high level of external debt, and excessive levels of spending. 
A)  stable exports and unstable imports. 
B)  low levels of external debt. 
C)  excessive levels of spending compared with its income and current account surpluses. 
D)  unstable exports, a high level of external debt, and excessive levels of spending.

Question 5

Exchange rate crises:

Accepted Answer

A)  are extremely rare. 
B)  are related to political crises. 
C)  typically occur in every nation several times each year. 
D)  are fairly common. 
A)  are extremely rare. 
B)  are related to political crises. 
C)  typically occur in every nation several times each year. 
D)  are fairly common.

Question 6

Which best describes the dollar-yuan exchange rate over time?

Accepted Answer

A)  volatile 
B)  steady 
C)  gradually rising 
D)  gradually declining 
A)  volatile 
B)  steady 
C)  gradually rising 
D)  gradually declining

Question 7

In the mid-2000s, a Swiss cheese maker blamed its decline in U.S. sales on:

Accepted Answer

A)  the fall of the euro in terms of the Swiss franc. 
B)  the rise of the euro in terms of the Swiss franc. 
C)  German tariffs that made the cheese more expensive. 
D)  the Euro area recession. 
A)  the fall of the euro in terms of the Swiss franc. 
B)  the rise of the euro in terms of the Swiss franc. 
C)  German tariffs that made the cheese more expensive. 
D)  the Euro area recession.

Question 8

Which of the following situations would NOT be compatible with the others?

Accepted Answer

A)  a deficit in the current account 
B)  expenditure being greater than income (production) in a nation 
C)  a rise in national wealth 
D)  new borrowing from the rest of the world 
A)  a deficit in the current account 
B)  expenditure being greater than income (production) in a nation 
C)  a rise in national wealth 
D)  new borrowing from the rest of the world

Question 9

Rank these regions in order of economic growth from fastest to slowest: Europe, South America, and Africa.

Accepted Answer

A)  Europe, Africa, South America 
B)  South America, Africa, Europe 
C)  Europe, South America, Africa 
D)  Africa, South America, Europe 
A)  Europe, Africa, South America 
B)  South America, Africa, Europe 
C)  Europe, South America, Africa 
D)  Africa, South America, Europe

Question 10

A credit rating of A means:

Accepted Answer

A)  easy access to low-interest loans. 
B)  more limited credit and possibly punitive interest rates. 
C)  higher interest rates. 
D)  you can set your own interest rates. 
A)  easy access to low-interest loans. 
B)  more limited credit and possibly punitive interest rates. 
C)  higher interest rates. 
D)  you can set your own interest rates.

Question 11

"Governance" is an important element in economic success and prosperity for any nation. List at least four of the six dimensions presented in the text that are highly correlated with good economic outcomes.

Accepted Answer

1. Voice and Accountability: This dimens

Question 12

Compared with the U.S. dollar-euro, the U.S. dollar-yuan exchange rate has exhibited:

Accepted Answer

A)  extreme fluctuation. 
B)  much less fluctuation. 
C)  a constant value. 
D)  complete control by the World Bank. 
A)  extreme fluctuation. 
B)  much less fluctuation. 
C)  a constant value. 
D)  complete control by the World Bank.

Question 13

Compared with the dollar-yuan exchange rate, the dollar-euro exchange rate is best described as:

Accepted Answer

A)  volatile. 
B)  steady. 
C)  gradually falling. 
D)  gradually rising. 
A)  volatile. 
B)  steady. 
C)  gradually falling. 
D)  gradually rising.

Question 14

International macroeconomics focuses on:

Accepted Answer

A)  isolated nations. 
B)  economy-wide variables such as interest rates, income, prices, and wealth. 
C)  city-level economic problems. 
D)  market-specific variables such as the price of orange juice. 
A)  isolated nations. 
B)  economy-wide variables such as interest rates, income, prices, and wealth. 
C)  city-level economic problems. 
D)  market-specific variables such as the price of orange juice.

Question 15

In the 12-year period from 1997 to 2009, there were ____ instances of exchange rate crises worldwide.

Accepted Answer

A)  3 
B)  10 
C)  16 
D)  24 
A)  3 
B)  10 
C)  16 
D)  24

Question 16

The list of developed countries includes:

Accepted Answer

A)  South Korea 
B)  Panama. 
C)  Estonia. 
D)  Poland. 
A)  South Korea 
B)  Panama. 
C)  Estonia. 
D)  Poland.

Question 17

When an exchange rate is said to be fixed, it:

Accepted Answer

A)  does not vary at all. 
B)  can vary a lot. 
C)  changes every day. 
D)  is volatile. 
A)  does not vary at all. 
B)  can vary a lot. 
C)  changes every day. 
D)  is volatile.

Question 18

Key elements of the international macroeconomy are:

Accepted Answer

A)  political alliances, capital accumulation, and monopoly power. 
B)  many currencies, financial integration, and economic policy choices made in context. 
C)  competition, efficiency, and openness. 
D)  waste and overuse of natural resources, disregard for the environment, and unfair competition. 
A)  political alliances, capital accumulation, and monopoly power. 
B)  many currencies, financial integration, and economic policy choices made in context. 
C)  competition, efficiency, and openness. 
D)  waste and overuse of natural resources, disregard for the environment, and unfair competition.

Question 19

Policies that work well in stable, well-governed nations:

Accepted Answer

A)  may not work well in poor nations if these nations lack stability and good governance. 
B)  should be looked at as an alternate policy regime for poor nations. 
C)  often do not represent the best policies for other rich nations. 
D)  tend to be less desirable during election years or in times of political upheaval. 
A)  may not work well in poor nations if these nations lack stability and good governance. 
B)  should be looked at as an alternate policy regime for poor nations. 
C)  often do not represent the best policies for other rich nations. 
D)  tend to be less desirable during election years or in times of political upheaval.

Question 20

A severe drop in the value of a nation's currency usually results in:

Accepted Answer

A)  high inflation. 
B)  low unemployment. 
C)  enhanced ability to pay foreign debts. 
D)  rising imports. 
A)  high inflation. 
B)  low unemployment. 
C)  enhanced ability to pay foreign debts. 
D)  rising imports.

Exam 12: The Global Macroeconomy

Governments affect international financial relationships through their policy regimes. These might include:

Exchange rate behavior is:

Optimal policies and policy regimes generally:

A nation with a relatively high country risk factor would MOST likely have:

Exchange rate crises:

Which best describes the dollar-yuan exchange rate over time?

In the mid-2000s, a Swiss cheese maker blamed its decline in U.S. sales on:

Which of the following situations would NOT be compatible with the others?

Rank these regions in order of economic growth from fastest to slowest: Europe, South America, and Africa.

A credit rating of A means:

"Governance" is an important element in economic success and prosperity for any nation. List at least four of the six dimensions presented in the text that are highly correlated with good economic outcomes.

Compared with the U.S. dollar-euro, the U.S. dollar-yuan exchange rate has exhibited:

Compared with the dollar-yuan exchange rate, the dollar-euro exchange rate is best described as:

International macroeconomics focuses on:

In the 12-year period from 1997 to 2009, there were ____ instances of exchange rate crises worldwide.

The list of developed countries includes:

When an exchange rate is said to be fixed, it:

Key elements of the international macroeconomy are:

Policies that work well in stable, well-governed nations:

A severe drop in the value of a nation's currency usually results in:

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

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

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

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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