Macro Unit 6 Review

When the dollar depreciates:

• It causes a leftward shift in AD.

• It creates a rightward shift in AD.

• It creates a leftward shift in SRAS.

• It creates a rightward shift in SRAS.

• It creates a rightward shift in LRAS.

Which of the following will most likely cause an inflow of financial capital to Canada?

• An increase in private savings in Canada

• An increase in the Canadian money supply

• An increase in real interest rates of Canada’s trading partners

• An increase in the Canadian federal budget deficit

• An increase in Canadian exports

Which of the following shifts demand for the US dollar in the foreign exchange market?

• US purchases of foreign goods

• US purchases of foreign services

• US purchases of foreign monetary assets

• Foreign purchases of US goods

• US tariffs on foreign goods

Which of the following will increase the supply of Mexican pesos on the foreign exchange market?

• Foreign purchases of Mexican goods increase

• Inflation rises in Mexico

• Interest rates fall in Mexico

• A quota on foreign imports, imposed by the Mexican government

• A US tariff imposed on Mexican goods

When the dollar appreciates:

• the demand for US exports increases.

• the supply of US exports increases.

• the demand for US exports decreases.

• the supply of foreign imports increases.

• the supply of US exports decreases.

Which of the following transactions is recorded as a credit entry in the country’s current account?

• Imports of capital goods

• Exports of consumer goods

• Purchases of foreign government bonds

• Sales of domestic financial assets to foreign investors

• Investments in foreign companies

How will an increase in private savings in the US likely affect financial capital flows?

• Capital inflows increase.

• Capital outflows increase.

• Capital flows do not change.

• Capital outflows decrease.

• Capital inflows decrease.