Question 1

Refer to the information provided in Figure 34.3 below to answer the question(s)  that follow. 0 to S1. B)  shift from S1 to S0. C)  shift from S2 to S1. D)  not change." class="answers-bank-image d-inline" rel="preload" > Figure 34.3
-Refer to Figure 34.3. If the British income decreases, the supply of pounds will

Accepted Answer

A)   shift from S0 to S1.
B)   shift from S1 to S0.
C)   shift from S2 to S1.
D)   not change.E) B) and C)
F) A) and D)

Question 2

If the MPC is 0.75 and the MPM is 0.2, the open economy multiplier is 4.

Accepted Answer

A) True 
 B)False

Question 3

The 2017 price level in Japan was relatively lower than the price level in the United States. Thus, a U.S. manufacturing facility looking to buy aluminum for its plant would most likely buy aluminum from Japan.

Accepted Answer

A) True 
 B)False

Question 4

If the MPM is 0.4, then a $2,000 increase in income will

Accepted Answer

A)   increase imports by $5,000.
B)   increase imports by $800.
C)   increase exports by $5,000.
D)   increase exports by $800.E) All of the above
F) B) and C)

Question 5

Which of the following is an item in the U.S. current account?

Accepted Answer

A)   net investment income
B)   the change in foreign private assets in the United States
C)   the change in private U.S. assets abroad
D)   the change in foreign government assets in the United StatesE) A) and B)
F) A) and C)

Question 6

Suppose that the price of a Blu-ray disc player is $240 in the United States and 11,000 rupees in India. If the current exchange rate is 40 rupees to the dollar, then purchasing power parity theory would predict that in the long run

Accepted Answer

A)   India will begin to export Blu-ray disc players to the United States.
B)   the exchange value of the rupee will depreciate.
C)   the exchange value of the rupee will appreciate.
D)   the exchange value of the dollar will depreciate.E) B) and C)
F) C) and D)

Question 7

Under a system of floating exchange rates, an excess supply for a particular currency will lead to a(n)

Accepted Answer

A)   depreciation of that currency.
B)   long-term shortage of that currency.
C)   appreciation of that currency.
D)   long-term surplus of that currency.E) None of the above
F) B) and C)

Question 8

When U.S. residents sell assets abroad, they are in essence

Accepted Answer

A)   borrowing money, and foreign debts to the United States decrease.
B)   borrowing money, and foreign debts to the United States increase.
C)   lending money, and foreign debts to the United States decrease.
D)   lending money, and foreign debts to the United States increase.E) B) and D)
F) A) and B)

Exam 34: Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Which of the following is an item in the U.S. current account?

Correct Answer
verified

If the MPM is 0.4, then a $2,000 increase in income will

Correct Answer
verified

If the MPC is 0.75 and the MPM is 0.2, the open economy multiplier is 4.

Correct Answer
verified

Under a system of floating exchange rates, an excess supply for a particular currency will lead to a(n)

Correct Answer
verified

The 2017 price level in Japan was relatively lower than the price level in the United States. Thus, a U.S. manufacturing facility looking to buy aluminum for its plant would most likely buy aluminum from Japan.

Correct Answer
verified

When U.S. residents sell assets abroad, they are in essence

Correct Answer
verified

Suppose that the price of a Blu-ray disc player is $240 in the United States and 11,000 rupees in India. If the current exchange rate is 40 rupees to the dollar, then purchasing power parity theory would predict that in the long run

Correct Answer
verified

Refer to the information provided in Figure 34.3 below to answer the question(s) that follow. Figure 34.3 -Refer to Figure 34.3. If the British income decreases, the supply of pounds will

Correct Answer
verified

Exam 34: Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Which of the following is an item in the U.S. current account?

Correct AnswerverifiedShow Answer

If the MPM is 0.4, then a $2,000 increase in income will

Correct AnswerverifiedShow Answer

If the MPC is 0.75 and the MPM is 0.2, the open economy multiplier is 4.

Correct AnswerverifiedShow Answer

Under a system of floating exchange rates, an excess supply for a particular currency will lead to a(n)

Correct AnswerverifiedShow Answer

The 2017 price level in Japan was relatively lower than the price level in the United States. Thus, a U.S. manufacturing facility looking to buy aluminum for its plant would most likely buy aluminum from Japan.

Correct AnswerverifiedShow Answer

When U.S. residents sell assets abroad, they are in essence

Correct AnswerverifiedShow Answer

Suppose that the price of a Blu-ray disc player is $240 in the United States and 11,000 rupees in India. If the current exchange rate is 40 rupees to the dollar, then purchasing power parity theory would predict that in the long run

Correct AnswerverifiedShow Answer

Refer to the information provided in Figure 34.3 below to answer the question(s) that follow. Figure 34.3 -Refer to Figure 34.3. If the British income decreases, the supply of pounds will

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified