1 - Which of the following is an automatic stabilizer ?
1 - Which of the following is an automatic stabilizer ?
Unemployment benefits
2 - Suppose the government increases its purchases by Rs16 billion. If the multiplier effect exceeds the crowding out effect, then ?
2 - Suppose the government increases its purchases by Rs16 billion. If the multiplier effect exceeds the crowding out effect, then ?
The aggregate demand curve shifts to the right by more than Rs 16 billion
3 - When an increase in government purchases raises incomes shifts money demand to the right raises the interest rate, and lowers investment we have seen a demonstration of ?
3 - When an increase in government purchases raises incomes shifts money demand to the right raises the interest rate, and lowers investment we have seen a demonstration of ?
The crowding-out effect
4 - An increase in the marginal propensity to consumer (MPC) ?
4 - An increase in the marginal propensity to consumer (MPC) ?
raises the value of the multiplier
5 - The initial impact of an increase in government spending is to shift ?
5 - The initial impact of an increase in government spending is to shift ?
aggregate demand to the right
6 - The initial effect of an increase in the money supply is to ?
6 - The initial effect of an increase in the money supply is to ?
increase the price level
7 - For the Eurozone countries, the most important source of the downward slope of the aggregate demand curve is probably ?
7 - For the Eurozone countries, the most important source of the downward slope of the aggregate demand curve is probably ?
The interest-rate effect
8 - When money demand is expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis an increase in the interest rate ?
8 - When money demand is expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis an increase in the interest rate ?
decrease the quantity demanded of money
9 - Which of the following best describes how an increase in the money supply shift the aggregate demand curve ?
9 - Which of the following best describes how an increase in the money supply shift the aggregate demand curve ?
The money supply shifts right the interest rate falls, investment increases, and the aggregate demand curve shifts right
10 - Which of the following statements about stabilization policy is not true ?
10 - Which of the following statements about stabilization policy is not true ?
Long lags enhance the ability of policy makers to fine tune the economy
11 - When an increase in government purchases increases the income of some people, and those people spend some of that increase in income on additional consumer goods, we have seen a demonstration of ?
11 - When an increase in government purchases increases the income of some people, and those people spend some of that increase in income on additional consumer goods, we have seen a demonstration of ?
The multiplier effects
12 - Which of the following statements regarding taxes is correct ?
12 - Which of the following statements regarding taxes is correct ?
A permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes.
13 - Suppose a wave of investor and consumer optimisms has increased spending so that the current level of input exceeds the long-run natural rate If policy makers choose to engage in activist stabilization policy they should ?
13 - Suppose a wave of investor and consumer optimisms has increased spending so that the current level of input exceeds the long-run natural rate If policy makers choose to engage in activist stabilization policy they should ?
decrease government spending Which the shifts the aggregate demand curve to the left
14 - If the marginal propensity of consume MPC is 0.75 the value of the multiplier is ?
14 - If the marginal propensity of consume MPC is 0.75 the value of the multiplier is ?
4
15 - Suppose a wave of investor and consumer pessimism in the USA causes a reduction in spending If the US federal Reserve (Which has a broader remit than the Bank of England Which is charged only with controlling inflation) chooses to engage in activist stabi
15 - Suppose a wave of investor and consumer pessimism in the USA causes a reduction in spending If the US federal Reserve (Which has a broader remit than the Bank of England Which is charged only with controlling inflation) chooses to engage in activist stabi
decrease interest rates
16 - In the market for real output, the initial effect of an increase in the money supply is to ?
16 - In the market for real output, the initial effect of an increase in the money supply is to ?
shift the aggregate demand curve to the right
17 - When supply and demand for money are expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis an increase in the price level ?
17 - When supply and demand for money are expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis an increase in the price level ?
shifts money demand to the right and increases the interest rate
18 - Keynes liquidity preference theory of the interest rate suggests that the interest rate is determined by ?
18 - Keynes liquidity preference theory of the interest rate suggests that the interest rate is determined by ?
the supply and demand for money
19 - According to the Phillips curve unemployment will return to the natural rate when ?
19 - According to the Phillips curve unemployment will return to the natural rate when ?
Nominal wages are equal to expected wages
20 - Menu costs in relation to inflation refers to ?
20 - Menu costs in relation to inflation refers to ?
Costs of altering price lists
21 - An increase in costs will ?
21 - An increase in costs will ?
Shift aggregate supply
22 - An increase in injections into the economy may lead to ?
22 - An increase in injections into the economy may lead to ?
An outward shift of aggregate demand- and demand-pull inflation
23 - Demand pull inflation may be caused by ?
23 - Demand pull inflation may be caused by ?
A reduction in interest rate
24 - If borrowers and lenders agree on a nominal interest rate and inflation turns out to be less than they had expected ?
24 - If borrowers and lenders agree on a nominal interest rate and inflation turns out to be less than they had expected ?
lenders will gain at the expense of borrowers
25 - Under which of the following conditions would you prefer to be the lender ?
25 - Under which of the following conditions would you prefer to be the lender ?
The nominal rate of interest is 5 percent and the inflation rate are 1 percent
26 - Which of the following statements is correct ?
26 - Which of the following statements is correct ?
The real interest rate is the nominal interest rate minus the inflation rate
27 - If the nominal interest rate is 7 percent and the inflation rate is 3 percent, then the real interest rate is ?
27 - If the nominal interest rate is 7 percent and the inflation rate is 3 percent, then the real interest rate is ?
4 percent
28 - Refer to Figure 24-1 What is the value of the basket in the base year ?
28 - Refer to Figure 24-1 What is the value of the basket in the base year ?
Rs300
29 - The "basket" on which the CPI is based is composed of ?
29 - The "basket" on which the CPI is based is composed of ?
Products purchased by the typical consumer
30 - In 1989, the CPI was 124.0 in 1990, it was 130.7 What was the rate of inflation over this period ?
30 - In 1989, the CPI was 124.0 in 1990, it was 130.7 What was the rate of inflation over this period ?
5.4 percent
31 - The Phillips curve shows the relationship between inflation and what ?
31 - The Phillips curve shows the relationship between inflation and what ?
The rate of price increase
32 - In the short run unemployment may fall below the natural rate of unemployment if ?
32 - In the short run unemployment may fall below the natural rate of unemployment if ?
Nominal wages have risen more than inflation
33 - The effect of inflation on the price competitiveness of a country's products may be offset by ?
33 - The effect of inflation on the price competitiveness of a country's products may be offset by ?
Lower inflation abroad
34 - An increase in aggregate demand is more likely to lead to demand pull inflation if ?
34 - An increase in aggregate demand is more likely to lead to demand pull inflation if ?
Aggregate supply is Perfectly inelastic
35 - Inflation ?
35 - Inflation ?
Reduce the price of products
36 - If workers and firms agree on an increase in wages based on their expectations of inflation and inflation turns out to be more than they expected ?
36 - If workers and firms agree on an increase in wages based on their expectations of inflation and inflation turns out to be more than they expected ?
firms will gain at the expense of workers.
37 - Under Which of the following conditions would you prefer to be the borrower ?
37 - Under Which of the following conditions would you prefer to be the borrower ?
The nominal rate of interest is 20 percent and the inflation rate is 25 percent
38 - If inflation is 8 percent and the real interest rate is 3 percent, then the nominal interest rate must be ?
38 - If inflation is 8 percent and the real interest rate is 3 percent, then the nominal interest rate must be ?
11 percent
39 - Suppose your income rises from Rs19,000 to Rs31,000 while the CPI rises from 122 to 169 Your standard of living has likely ?
39 - Suppose your income rises from Rs19,000 to Rs31,000 while the CPI rises from 122 to 169 Your standard of living has likely ?
risen
40 - If there is an increase in the price of apples which causes consumers to purchase fewer kilograms of apples and more kilograms of oranges, the CPI will suffer from ?
40 - If there is an increase in the price of apples which causes consumers to purchase fewer kilograms of apples and more kilograms of oranges, the CPI will suffer from ?
substitution bias
41 - Which of the following would probably cause the CPI to rise more than the GDP deflator in the Pakistan ?
41 - Which of the following would probably cause the CPI to rise more than the GDP deflator in the Pakistan ?
An increase in the price of BMWs produced in Germany and sold in the Pakistan
42 - Inflation can be measured by all of the following except the ?
42 - Inflation can be measured by all of the following except the ?
finished goods price index
43 - Under a system of floating exchange rates there is a general tendency for ?
43 - Under a system of floating exchange rates there is a general tendency for ?
the currencies of relatively high-inflation countries to depreciate
44 - The rise in value of one currency relative to another is ?
44 - The rise in value of one currency relative to another is ?
An appreciation of a currency
45 - A fiscal expansion in the UK ?
45 - A fiscal expansion in the UK ?
tends to appreciate the pound sterling
46 - Exchange rates that are determined by the unregulated forces of supply and demand are ?
46 - Exchange rates that are determined by the unregulated forces of supply and demand are ?
floating exchange rates
47 - The agreements that were reached at the Bretton Woods conferences in 1944 established a system ?
47 - The agreements that were reached at the Bretton Woods conferences in 1944 established a system ?
of essentially fixed exchange rates under which each country agreed to intervene in the foreign exchange market when necessary to maintain the agreed upon value of its currency
48 - The price of one country's currency in terms of another country's currency is the ?
48 - The price of one country's currency in terms of another country's currency is the ?
exchange rate
49 - A difference between forward and futures contracts is that ?
49 - A difference between forward and futures contracts is that ?
forward contracts can be tailored in amount and delivery date to the need of importers of exporters
50 - Currency speculation is _____ if speculators bet against market forces that cause exchange fluctuations, thus moderating such fluctuations ?
50 - Currency speculation is _____ if speculators bet against market forces that cause exchange fluctuations, thus moderating such fluctuations ?
stabilizing
51 - If the exchange rate is 11 Mexican pesos per U.S dollar, then it takes _______ to buy 1 peso?
51 - If the exchange rate is 11 Mexican pesos per U.S dollar, then it takes _______ to buy 1 peso?
0.0909
52 - Suppose that Boeing is to receive payment in euros in 6 month and wants to engage in hedging the firm would _______ euros on the 6-month forward market in order to protect itself from a/an of the euro?
52 - Suppose that Boeing is to receive payment in euros in 6 month and wants to engage in hedging the firm would _______ euros on the 6-month forward market in order to protect itself from a/an of the euro?
sell; depreciation
53 - The essential feature of a _______ is that it immediately fixed the rate at which a specified amount of one currency is to be delivered in exchange for a specific amount of another at a future date ?
53 - The essential feature of a _______ is that it immediately fixed the rate at which a specified amount of one currency is to be delivered in exchange for a specific amount of another at a future date ?
forward contract
54 - The difference between bid (buying) rates and ask (selling) rates is called the ?
54 - The difference between bid (buying) rates and ask (selling) rates is called the ?
spread
55 - The least common type of transaction in the foreign exchange is a ?
55 - The least common type of transaction in the foreign exchange is a ?
forward transaction
56 - The reduction or covering of foreign exchange risk is called ?
56 - The reduction or covering of foreign exchange risk is called ?
hedging
57 - Suppose there occurs an increase in the Canadian demand for Japanese computers This results in a (an) ?
57 - Suppose there occurs an increase in the Canadian demand for Japanese computers This results in a (an) ?
increase in the demand for yen
58 - Given the foreign currency market for the Swiss franc, the supply of franc slopes upward, because as the dollar price of the franc rises ?
58 - Given the foreign currency market for the Swiss franc, the supply of franc slopes upward, because as the dollar price of the franc rises ?
Switzerland's demand for American merchandise rises
59 - Which financial instrument provides a buyer the right to purchase or sell a fixed amount of currency at a prearranged price, within a few days to a couple of years ?
59 - Which financial instrument provides a buyer the right to purchase or sell a fixed amount of currency at a prearranged price, within a few days to a couple of years ?
foreign currency option
60 - A depreciation of the dollar will have its most pronounced impact on imports if the demand for imports is ?
60 - A depreciation of the dollar will have its most pronounced impact on imports if the demand for imports is ?
elastic
61 - In the early eighties, the Federal Reserve pursed a tight monetary policy. All else being equal. the impact of that policy was to interest rates in the United States relative to those in Europe and cause the dollar to _______ against European currencies?
61 - In the early eighties, the Federal Reserve pursed a tight monetary policy. All else being equal. the impact of that policy was to interest rates in the United States relative to those in Europe and cause the dollar to _______ against European currencies?
increase; appreciate
62 - The supply of foreign currency tends to be ?
62 - The supply of foreign currency tends to be ?
upward sloping
63 - The J-curve effect refers to the observation that ?
63 - The J-curve effect refers to the observation that ?
the trade balance usually gets worse before it improves after a currency depreciation
64 - If a nation's interest rates are relatively low compared to those of other countries then the exchange value of its currency will tend to ?
64 - If a nation's interest rates are relatively low compared to those of other countries then the exchange value of its currency will tend to ?
depreciate under a system of floating exchange rates
65 - The theory of international exchange that holds that exchange rates adjust to offset differences in countries inflation rates in the ?
65 - The theory of international exchange that holds that exchange rates adjust to offset differences in countries inflation rates in the ?
purchasing power parity theory
66 - The fall in value of one currency relative to another is ?
66 - The fall in value of one currency relative to another is ?
a depreciation of a currency
67 - Expansionary monetary policy ?
67 - Expansionary monetary policy ?
tends to lead to a depreciation of a nation's currency
68 - If the Bank of England reduces the money supply to reduce inflation a floating exchange rate will aid the Bank of England in fighting inflation because ?
68 - If the Bank of England reduces the money supply to reduce inflation a floating exchange rate will aid the Bank of England in fighting inflation because ?
as the money supply is decreased the interest rate will increase and the price of UK exports and UK imports will fall.
69 - In 1971, most countries ?
69 - In 1971, most countries ?
gave up trying to fix exchange rates formally and began allowing them to be determined essentially by supply and demand
70 - All currencies other than the domestic currency of a given country are referred to as ?
70 - All currencies other than the domestic currency of a given country are referred to as ?
foreign exchange
71 - The real effective exchange rate for the U.S dollar ?
71 - The real effective exchange rate for the U.S dollar ?
is the weighted average of the dollar exchange rate relative to the currencies of important U.S trading partners adjusted for inflation?
72 - Investor engage in _____ when they move funds into foreign currencies in order to take advantage to interest rates abroad that are higher than domestic interest rates ?
72 - Investor engage in _____ when they move funds into foreign currencies in order to take advantage to interest rates abroad that are higher than domestic interest rates ?
interest arbitrage
73 - Which of the following is not a reason why Joe Smith (an American) might participate as a demander in the foreign exchange market ?
73 - Which of the following is not a reason why Joe Smith (an American) might participate as a demander in the foreign exchange market ?
his desire to purchase an automobile produced domestically
74 - If Sweden's currency depreciates relative to Norway's currency ?
74 - If Sweden's currency depreciates relative to Norway's currency ?
Sweden's export goods become cheaper to Norway's residents
75 - The franc is said to be selling at a _______ if the spot dollar price is $0.48 and the nine-month forward rate is $0.42 ?
75 - The franc is said to be selling at a _______ if the spot dollar price is $0.48 and the nine-month forward rate is $0.42 ?
forward discount
76 - Riskless transactions to take advantage of profit opportunities due to a price differential or a yield differential in excess of transaction costs are called ?
76 - Riskless transactions to take advantage of profit opportunities due to a price differential or a yield differential in excess of transaction costs are called ?
arbitrage
77 - If the bank is selling francs for $0.45, then what is the implied franc price of the dollar ?
77 - If the bank is selling francs for $0.45, then what is the implied franc price of the dollar ?
2.222
78 - An important feature of a _______ is that the holder has the right but not the obligation to buy or sell currency ?
78 - An important feature of a _______ is that the holder has the right but not the obligation to buy or sell currency ?
foreign exchange option
79 - The exchange rate is kept the same across geographically separate markets by ?
79 - The exchange rate is kept the same across geographically separate markets by ?
arbitrage
80 - In a supply and demand diagram for Japanese yen, with the exchange rate in dollars per yen on the vertical axis, the demand schedule for yen is drawn sloping ?
80 - In a supply and demand diagram for Japanese yen, with the exchange rate in dollars per yen on the vertical axis, the demand schedule for yen is drawn sloping ?
downward
81 - The largest volume of foreign exchange trading takes place in ?
81 - The largest volume of foreign exchange trading takes place in ?
United Kingdom
82 - During the era of dollar appreciation from 1981 to 1985 a main reason why the dollar did not fall in value was ?
82 - During the era of dollar appreciation from 1981 to 1985 a main reason why the dollar did not fall in value was ?
flows of foreign investment into the United States
83 - Under a system of floating exchange rates the pound would depreciate in value if there occurs ?
83 - Under a system of floating exchange rates the pound would depreciate in value if there occurs ?
falling interest rates in Britain
84 - Suppose that a Swiss television set that costs 400 francs in Switzerland cost $200 in the United States. The exchange rate between the franc and the dollar is ?
84 - Suppose that a Swiss television set that costs 400 francs in Switzerland cost $200 in the United States. The exchange rate between the franc and the dollar is ?
2 francs per dollar
85 - The most widely traded currency in the foreign exchange market is the ?
85 - The most widely traded currency in the foreign exchange market is the ?
U.S dollar
86 - Assume that a Big Mac hamburger cost $3 in the United States 2 pesos in Mexico The implied purchasing power parity exchange rate between the peso and the dollar is ?
86 - Assume that a Big Mac hamburger cost $3 in the United States 2 pesos in Mexico The implied purchasing power parity exchange rate between the peso and the dollar is ?
0.67 pesos = $1
87 - Due to Japan's high saving rate, suppose that the Japanese invest abroad. This investment may result in a/an _______ of the Japanese yen and therefore a for Japan?
87 - Due to Japan's high saving rate, suppose that the Japanese invest abroad. This investment may result in a/an _______ of the Japanese yen and therefore a for Japan?
depreciation; trade surplus
88 - Assume identical interest rates on comparable securities in the United States and foreign countries. Suppose investors anticipate that in the future the U.S dollar will depreciate against foreign currencies. investment funds would tend to ?
88 - Assume identical interest rates on comparable securities in the United States and foreign countries. Suppose investors anticipate that in the future the U.S dollar will depreciate against foreign currencies. investment funds would tend to ?
flow from the United States to foreign countries
89 - Starting from a position where the nation's money demand equals the money supply and its balance of payments is in equilibrium its balance of payments would move into a surplus position if there occurred in the nation a (an) ?
89 - Starting from a position where the nation's money demand equals the money supply and its balance of payments is in equilibrium its balance of payments would move into a surplus position if there occurred in the nation a (an) ?
decrease in the money supply
90 - Which example of market expectations causes the dollar to appreciate against the yen– expectations that the U.S economy will have ?
90 - Which example of market expectations causes the dollar to appreciate against the yen– expectations that the U.S economy will have ?
higher future interest rates than Japan
91 - Given a system of floating exchange rates falling income in the United States would trigger a (an) ?
91 - Given a system of floating exchange rates falling income in the United States would trigger a (an) ?
decrease in the demand for imports and a decrease in the demand for foreign currency
92 - For the United States suppose the annual interest rate on government securities equals 12 percent while the annual inflation rate equals 8 percent For Japan the annual interest rate on government securities equals 10 percent while the annual inflation rat
92 - For the United States suppose the annual interest rate on government securities equals 12 percent while the annual inflation rate equals 8 percent For Japan the annual interest rate on government securities equals 10 percent while the annual inflation rat
The United States to Japan causing the dollar to depreciate
93 - If Japan runs current account deficit and exchange rates are floating?
93 - If Japan runs current account deficit and exchange rates are floating?
Japanese exports become less expensive for foreign buyers
94 - Suppose Canada and Switzerland were the only two countries in the world There exists an excess supply of Swiss francs on the foreign exchange market This suggests that ?
94 - Suppose Canada and Switzerland were the only two countries in the world There exists an excess supply of Swiss francs on the foreign exchange market This suggests that ?
the Swiss current account balance is in deficit
95 - When the price of foreign currency (the exchange rate) is above the equilibrium level ?
95 - When the price of foreign currency (the exchange rate) is above the equilibrium level ?
an excess supply of that currency exists in the foreign exchange market
96 - The high foreign exchange value of the U.S dollar in the early 1980s can best be explained by ?
96 - The high foreign exchange value of the U.S dollar in the early 1980s can best be explained by ?
additional investment funds made available from overseas
97 - IF when cost $4 per bushel in the United States and 2 pounds per bushel in Great Britain then in the presence of purchasing power parity the exchange rate should be ?
97 - IF when cost $4 per bushel in the United States and 2 pounds per bushel in Great Britain then in the presence of purchasing power parity the exchange rate should be ?
$2.00 per pound
98 - Assume that the United States faces a percent inflation rate while no (zero) inflation exists in Japan. According to the purchasing power parity theory over the long run the dollar would be expected to ?
98 - Assume that the United States faces a percent inflation rate while no (zero) inflation exists in Japan. According to the purchasing power parity theory over the long run the dollar would be expected to ?
depreciate by 8 percent against the yen
99 - Relatively low real interest rates in the United States tend to ?
99 - Relatively low real interest rates in the United States tend to ?
decrease the foreign demand for dollars causing the dollar to depreciate
100 - If the exchange rate between Swiss francs and British pounds is 5 francs per pound, then the number of pounds that can be obtained for 200 francs equals ?
100 - If the exchange rate between Swiss francs and British pounds is 5 francs per pound, then the number of pounds that can be obtained for 200 francs equals ?
40 pounds
101 - Exchange rate overshooting often occurs because ?
101 - Exchange rate overshooting often occurs because ?
elasticities are smaller in the short run than the long run
102 - According to the asset market approach increased investor confidence in the Mexican economy would cause the peso to ?
102 - According to the asset market approach increased investor confidence in the Mexican economy would cause the peso to ?
appreciated because of an increased demand for peso denominated assets
103 - The purchasing power parity theory has limitations in forecasting exchange rate fluctuations for all of the following reasons except ?
103 - The purchasing power parity theory has limitations in forecasting exchange rate fluctuations for all of the following reasons except ?
inflation effects exchange rates
104 - The asset market approach views exchange rates as being determined mainly by ?
104 - The asset market approach views exchange rates as being determined mainly by ?
efforts of investors to balance their portfolios among financial assets denominated in different currencies
105 - The assets market approach is most helpful in explaining ?
105 - The assets market approach is most helpful in explaining ?
short term exchange rate movements
106 - Consulting firms that use large-scale econometric models to forecast exchange rate movements are engaging in ?
106 - Consulting firms that use large-scale econometric models to forecast exchange rate movements are engaging in ?
fundamental analysis
107 - Suppose that the purchasing power parity estimate of the dollar/euro exchange rate is $1.30 per euro, and the current spot rate is $1.3 8 per euro. Comparing these two exchange rates from a long-run viewpoint you would ?
107 - Suppose that the purchasing power parity estimate of the dollar/euro exchange rate is $1.30 per euro, and the current spot rate is $1.3 8 per euro. Comparing these two exchange rates from a long-run viewpoint you would ?
anticipate the dollar to appreciate against the euro
108 - Suppose that rising U.S income leads to higher sales and profits in the United States This would likely result in ?
108 - Suppose that rising U.S income leads to higher sales and profits in the United States This would likely result in ?
increasing direct investment into the United States
109 - Starting from a position where the nation's money demand equals the money supply and its balance of payments is in equilibrium economic theory suggests that the nation's balance of payments would move into a surplus position if there occurred in the natio
109 - Starting from a position where the nation's money demand equals the money supply and its balance of payments is in equilibrium economic theory suggests that the nation's balance of payments would move into a surplus position if there occurred in the natio
increase in the money demand
110 - Which example of market expectations causes the dollar to depreciate against the yen – expectation that the U.S economy will have ?
110 - Which example of market expectations causes the dollar to depreciate against the yen – expectation that the U.S economy will have ?
faster growth than Japan
111 - Under a system of floating exchange rates relatively high productivity and low inflation rates in the United States results in a (an) ?
111 - Under a system of floating exchange rates relatively high productivity and low inflation rates in the United States results in a (an) ?
increase in the demand for foreign currency an increase in the supply of foreign currency and a appreciation in the dollar
112 - Under a system of floating exchange rates relatively low productivity and high inflation rates in the United States results in a (an) ?
112 - Under a system of floating exchange rates relatively low productivity and high inflation rates in the United States results in a (an) ?
increase in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar
113 - Given a system of floating exchange rates rising income in the United States would trigger a (an) ?
113 - Given a system of floating exchange rates rising income in the United States would trigger a (an) ?
increasing in the demand for imports and an increasing in the demand for foreign currency
114 - For the United States suppose the annual interest rate on government securities equals 8 percent while the annual inflation rate equals 4 percent, For Switzerland the annual interest rate on government securities equal 10 percent while the annual inflatio
114 - For the United States suppose the annual interest rate on government securities equals 8 percent while the annual inflation rate equals 4 percent, For Switzerland the annual interest rate on government securities equal 10 percent while the annual inflatio
Switzerland to the United States causing the franc to depreciate
115 - The exchange value of the U.S dollar is primarily determined by ?
115 - The exchange value of the U.S dollar is primarily determined by ?
the international demand and supply for dollars
116 - If Canada runs a balance of payments surplus and exchange rates are floating ?
116 - If Canada runs a balance of payments surplus and exchange rates are floating ?
the price of foreign goods will become cheaper to Canadians
117 - The appreciation in the value of the dollar in the early 1980s is explained by all of the following except ?
117 - The appreciation in the value of the dollar in the early 1980s is explained by all of the following except ?
relatively high inflation rates in the United States
118 - When the price of foreign currency (i.e the exchange rate) is below the equilibrium level ?
118 - When the price of foreign currency (i.e the exchange rate) is below the equilibrium level ?
an excess demand for that currency exists in the foreign exchange market
119 - A primary reason that explains the appreciation in the value of U.S dollar would be ?
119 - A primary reason that explains the appreciation in the value of U.S dollar would be ?
high interest rates in the United States
120 - In the presences of purchasing power parity, if one-dollar exchanges for 2 British pounds and if a DVD player costs $400 in the United States then in Britain the DVD player should cost ?
120 - In the presences of purchasing power parity, if one-dollar exchanges for 2 British pounds and if a DVD player costs $400 in the United States then in Britain the DVD player should cost ?
800 pounds
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