Question 1

Compare and contrast policies, regimes and institutions as they relate to government action.

Accepted Answer

Policies, regimes, and institutions are

Question 2

In June of 2010, the Chinese government:

Accepted Answer

A)  cracked down on illegal currency trading. 
B)  reduced the value of the yuan in terms of the U.S. dollar. 
C)  allowed a gradual appreciation in the value of the yuan in terms of the U.S. dollar. 
D)  allowed the yuan to fluctuate freely according to the market. 
A)  cracked down on illegal currency trading. 
B)  reduced the value of the yuan in terms of the U.S. dollar. 
C)  allowed a gradual appreciation in the value of the yuan in terms of the U.S. dollar. 
D)  allowed the yuan to fluctuate freely according to the market.

Question 3

Which of the following credit ratings is MOST favorable?

Accepted Answer

A)  BBB+ 
B)  BBB- 
C)  CC 
D)  D 
A)  BBB+ 
B)  BBB- 
C)  CC 
D)  D

Question 4

Since 1970, governments worldwide have:

Accepted Answer

A)  discouraged trade and raised levels of protection for workers. 
B)  discouraged international investment to favor domestic financial markets. 
C)  rejected globalization because it makes a nation more vulnerable. 
D)  lifted barriers to international capital movements and trade. 
A)  discouraged trade and raised levels of protection for workers. 
B)  discouraged international investment to favor domestic financial markets. 
C)  rejected globalization because it makes a nation more vulnerable. 
D)  lifted barriers to international capital movements and trade.

Question 5

What are the six characteristics of "good" institutions, and why are they considered good (i.e., what are the benefits of good institutions)?

Accepted Answer

The six characteristics of "good" instit

Question 6

External wealth can increase by all of the following, EXCEPT:

Accepted Answer

A)  rises in the value of international assets (capital gains). 
B)  decreases in the value of liabilities to international entities. 
C)  borrowing from international entities. 
D)  lending to international entities. 
A)  rises in the value of international assets (capital gains). 
B)  decreases in the value of liabilities to international entities. 
C)  borrowing from international entities. 
D)  lending to international entities.

Question 7

International lenders want to know the likelihood that a nation will repay its debt. Therefore, they rely on:

Accepted Answer

A)  collateral. 
B)  international ratings of country risk. 
C)  the faith and credit of the sovereign nation. 
D)  advice from the International Monetary Fund (IMF). 
A)  collateral. 
B)  international ratings of country risk. 
C)  the faith and credit of the sovereign nation. 
D)  advice from the International Monetary Fund (IMF).

Question 8

What is the eurozone?

Accepted Answer

A)  a common European defense system supplemented by radar and strategic monitoring systems 
B)  a trade agreement among the nations of Europe not to impose tariffs on one another 
C)  a group of European nations that have adopted a common currency 
D)  regions of the world that allow traders to make bank deposits in euros 
A)  a common European defense system supplemented by radar and strategic monitoring systems 
B)  a trade agreement among the nations of Europe not to impose tariffs on one another 
C)  a group of European nations that have adopted a common currency 
D)  regions of the world that allow traders to make bank deposits in euros

Question 9

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

Accepted Answer

A)  border controls regulating goods coming into or leaving from the nation. 
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)  border controls regulating goods coming into or leaving from the nation. 
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 10

Changes in a nation's exchange rates have an impact on:

Accepted Answer

A)  prices of equities but not domestic bonds 
B)  relative prices of home and foreign goods. 
C)  prices of nontradable services. 
D)  prices of international bonds but not equities. 
A)  prices of equities but not domestic bonds 
B)  relative prices of home and foreign goods. 
C)  prices of nontradable services. 
D)  prices of international bonds but not equities.

Question 11

The study of international macroeconomics will enable you to understand important issues and identify good solutions to problems and tensions. Name several items in the study of international macroeconomics, an understanding of which can help clarify and instruct policy and governance.

Accepted Answer

Several items in the study of internatio

Question 12

A consequence of the world movement toward financial integration and openness is:

Accepted Answer

A)  depreciating exchange rates. 
B)  financial interdependence coupled with a tenfold increase in the volume of foreign assets. 
C)  a retreat toward safety and heavier regulation of financial flows. 
D)  dominance by the United States as being the only destination for investment funds. 
A)  depreciating exchange rates. 
B)  financial interdependence coupled with a tenfold increase in the volume of foreign assets. 
C)  a retreat toward safety and heavier regulation of financial flows. 
D)  dominance by the United States as being the only destination for investment funds.

Question 13

European residents who hold U.S. dollar assets experience a _______ in their value when the dollar exchanges for fewer units of foreign currency.

Accepted Answer

A)  rise 
B)  decline 
C)  stagnation 
D)  rise in instability 
A)  rise 
B)  decline 
C)  stagnation 
D)  rise in instability

Question 14

Argentina's currency crisis, which began in 2002, is blamed for:

Accepted Answer

A)  the lack of literacy and moral corruption. 
B)  extreme poverty, high unemployment, and social unrest. 
C)  disturbing the international trade balance. 
D)  its subsequent high debts. 
A)  the lack of literacy and moral corruption. 
B)  extreme poverty, high unemployment, and social unrest. 
C)  disturbing the international trade balance. 
D)  its subsequent high debts.

Question 15

Countries with good institutions have:

Accepted Answer

A)  higher per capita income. 
B)  greater income volatility. 
C)  higher per capita income and greater income volatility. 
D)  lower per capita income. 
A)  higher per capita income. 
B)  greater income volatility. 
C)  higher per capita income and greater income volatility. 
D)  lower per capita income.

Question 16

The advanced nations:

Accepted Answer

A)  were least open to globalization and free movement of capital. 
B)  led the movement toward globalization and openness during the 1980s. 
C)  had to compete with the developing nations and finally learned that financial openness was beneficial to their economies. 
D)  were not as open to globalization as were the emerging markets. 
A)  were least open to globalization and free movement of capital. 
B)  led the movement toward globalization and openness during the 1980s. 
C)  had to compete with the developing nations and finally learned that financial openness was beneficial to their economies. 
D)  were not as open to globalization as were the emerging markets.

Question 17

Suppose that a loan made in euros has experienced a capital gain. This indicates that the:

Accepted Answer

A)  dollar appreciated. 
B)  dollar depreciated. 
C)  euro depreciated. 
D)  dollar experienced a capital loss. 
A)  dollar appreciated. 
B)  dollar depreciated. 
C)  euro depreciated. 
D)  dollar experienced a capital loss.

Question 18

Which of the following are financial instruments?

Accepted Answer

A)  real estate properties 
B)  grocery store loyalty cards 
C)  retail store inventories 
D)  savings accounts, credit cards, and mortgages 
A)  real estate properties 
B)  grocery store loyalty cards 
C)  retail store inventories 
D)  savings accounts, credit cards, and mortgages

Question 19

What is an exchange rate?

Accepted Answer

A)  It is percentage rate of interest charged by international banks to exchange currency. 
B)  It is fees banks charge their best customers to exchange currency. 
C)  It is price of one nation's currency measured in units of another nation's currency. 
D)  It is lending rate for international credit. 
A)  It is percentage rate of interest charged by international banks to exchange currency. 
B)  It is fees banks charge their best customers to exchange currency. 
C)  It is price of one nation's currency measured in units of another nation's currency. 
D)  It is lending rate for international credit.

Question 20

A nation's net creditor position indicates that it:

Accepted Answer

A)  has collected more in taxes than its government has spent. 
B)  owes money to other foreign and international government agencies. 
C)  has positive net external wealth. 
D)  has negative net external wealth. 
A)  has collected more in taxes than its government has spent. 
B)  owes money to other foreign and international government agencies. 
C)  has positive net external wealth. 
D)  has negative net external wealth.

Exam 12: The Global Macroeconomy

Compare and contrast policies, regimes and institutions as they relate to government action.

In June of 2010, the Chinese government:

Which of the following credit ratings is MOST favorable?

Since 1970, governments worldwide have:

What are the six characteristics of "good" institutions, and why are they considered good (i.e., what are the benefits of good institutions)?

External wealth can increase by all of the following, EXCEPT:

International lenders want to know the likelihood that a nation will repay its debt. Therefore, they rely on:

What is the eurozone?

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

Changes in a nation's exchange rates have an impact on:

The study of international macroeconomics will enable you to understand important issues and identify good solutions to problems and tensions. Name several items in the study of international macroeconomics, an understanding of which can help clarify and instruct policy and governance.

A consequence of the world movement toward financial integration and openness is:

European residents who hold U.S. dollar assets experience a _______ in their value when the dollar exchanges for fewer units of foreign currency.

Argentina's currency crisis, which began in 2002, is blamed for:

Countries with good institutions have:

The advanced nations:

Suppose that a loan made in euros has experienced a capital gain. This indicates that the:

Which of the following are financial instruments?

What is an exchange rate?

A nation's net creditor position indicates that it:

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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