Macro
1.
The graph above shows the foreign exchange market for United States dollars in terms of Japanese yen. Assume that there is an increase in United States consumers' preference for Japanese automobiles. -
The supply of dollars will increase.
2.
An increase in the international value of the United States dollar will most likely benefit -
retired United States citizens living overseas on their social security checks
3.
In a country that has a flexible exchange rate and a banking system with limited reserves, an open market sale of bonds by the central bank will most likely change the money supply, the interest rate, and the value of the country's currency in which of the following ways? -
Money Supply: Decrease
Interest Rate: Increase
Value of the Currency: Increase
4.
If real interest rates in the United States fall relative to real interest rates in Great Britain, which of the following will occur? -
The British pound will appreciate relative to the dollar.
5.
Based on the table, which of the following describes the balance in the current account and in the capital and financial account? -
The current account is in deficit and the capital and financial account is in surplus.
6.
Based on the table, the nation's trade balance is equal to which of the following? -
$100 million
7.
Which of the following would be a current account transaction? -
A United States firm sells $500 million of its products to a Chinese company.
8.
The currency of the United States is the United States dollar (USD), and the currency of Mexico is the Mexican peso (MXN). The United States and Mexico are trading partners with flexible exchange rate systems. The graph provided shows the market for the United States dollar. Which of the following events would cause the shift in the supply of dollars from SusD, to Susp, shown in the graph? -
Americans increase their demand for vacations in Mexico.
9.
If the price of the Swedish krona changes from 12 Japanese yen per krona to 13 Japanese yen per krona, then which of the following describes the change in the yen and the change in the cost of Swedish goods to residents of Japan? -
Yen depreciates. Change in cost of swedish: increase
10.
Which of the following transactions would increase the current account surplus in Japan's balance of payments accounts?
-
A Japan-based company sells roasted coffee to Canada.
11.
Suppose that Country A is experiencing high inflation relative to Country B, which is enjoying steady growth with a stable price level. Which of the following would occur in the foreign exchange market?
-
A depreciation of Country A's currency
12.
Assume that the Federal Reserve pursues a contractionary monetary policy. Based on the resulting change in the interest rate, what will happen to the international value of the dollar, United States imports, and United States exports?
- international: increase . Us imports: decrease. Exports: increase.
13.
England and France are trading partners. If England's currency, the pound sterling, depreciates relative to France's currency, the euro, which of the following will happen?
-
Aggregate demand will increase in England.
14.
What is the balance on the current account, in billions of dollars, for the period?- +70
15.
Which of the following is true of a current account deficit? -
is financed by a surplus in the financial (capital) account.
16.
Country X's government increases its spending without raising taxes. Which of the following is true about the effect on Country X's real interest rates and its subsequent effect on Country X's net exports?
-
Real interest rates increase and net exports decrease.
17.
The price of one nation's currency expressed in terms of another nation's currency is called
- exchange rate
18.
If a French firm buys computers from the United States, there would be an increase in which of the following in the foreign exchange market?
-
Demand for United States dollars and supply of euros
19.
Which of the following is likely to result in an inflow of financial capital to Country R?
-
An increase in administered interest rates by the central bank of Country R
20.
If the real interest rates in the United States rise relative to rates in other countries, what will happen to the international value of the United States dollar and United States net exports? - value of dollar: appreciation . Net exports: decrease
21.
Which of the following transactions is included in the financial account of Country X's balance of payments accounts?
-
An individual in Country X buys new government bonds issued by Country E.
22.
An increase in Japan's demand for United States goods would cause the value of the dollar to
-
appreciate because Japan would be buying more United Stated dollars
23.
The purchase of United States government bonds by Japanese investors will be included in Japan's
- financial account
24.
Which of the following is recorded in a country's current account?
-
The value of consumer goods produced abroad and purchased by the country's residents
25.
Assume that the United States current account balance is zero. If the United States dollar appreciates against the Japanese yen, then demand for United States exports will
-
decrease and result in a surplus in the United States financial account