AP Macroeconomics U5U6 Quiz

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 surplus and the capital and financial account is in surplus.

• The current account is in surplus and the capital and financial account is in deficit.

• The current account is in deficit and the capital and financial account is in surplus.

• The current account is in deficit and the capital and financial account is in deficit.

• The current account is in surplus and the capital and financial account is zero.

Based on the table, the nation’s trade balance is equal to which of the following?

• million

• million

• $100 million

• $770 million

• $900 million

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?

• 
• 
• 
• 
• 

Which of the following best explains the change in the international value of the peso caused by a shift of the demand curve from to in the dollar-peso foreign exchange market?

• The peso has appreciated because Americans’ demand for Mexican financial assets increased.

• The peso has appreciated because Mexicans’ demand for United States financial assets increased.

• The peso has depreciated because Americans’ demand for Mexican goods and services decreased.

• The peso has depreciated because Mexicans’ demand for American goods and services decreased.

• The peso has depreciated because Americans are unwilling to sell products to Mexico.

An increase in government spending financed by borrowing will result in which of the following?

• Private savings will decrease in the short run.

• The real interest rate will decrease in the short run.

• Interest-sensitive private sector spending will increase in the short run.

• Potential real output will increase in the long run.

• The rate of physical capital accumulation will decrease in the long run.

If a nation’s currency appreciates relative to that of its trading partners, what will happen to the nation’s exports, imports and aggregate demand?

• Exports: Increase Imports: Decrease Aggregate Demand: Increase

• Exports: Increase Imports: Increase Aggregate Demand: Increase

• Exports: Decrease Imports: Increase Aggregate Demand: Increase

• Exports: Decrease Imports: Increase Aggregate Demand: Decrease

• Exports: Decrease Imports: Decrease Aggregate Demand: Decrease

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?

• French exports to England will increase.

• French imports from England will decrease.

• Aggregate demand will increase in France.

• Aggregate demand will increase in England.

• Aggregate demand will decrease in England.

A depreciation of the United States dollar in foreign exchange markets will result in which of the following?

• A decrease in aggregate demand because net exports will increase.

• A decrease in aggregate demand because imports will decrease.

• A decrease in aggregate demand because exports will increase.

• An increase in aggregate demand because imports will decrease.

• An increase in aggregate demand because exports will decrease.

An increase in a government’s deficit spending will most likely affect a nation in an open economy in which of the following ways?

• The economy will experience financial capital outflows, and its currency will appreciate.

• The economy will experience financial capital outflows, and its currency will depreciate.

• The economy will experience financial capital inflows, and its currency will appreciate.

• The economy will experience financial capital inflows, and its currency will depreciate.

• The economy will experience no change in financial capital flows, and the value of its currency will not change.

Which of the following causes economic growth?

• A decrease in the money supply

• A decrease in the price level

• An increase in nominal output

• An increase in consumption spending

• An increase in labor productivity