WorksheetsAP Macroeconmics Unit 6 Practice
Total questions: 20
Worksheet time: 10mins
Who has the absolute advantage in apples?
Billy
Freddy
Both
Neither
Who has the absolute advantage in bananas?
Billy
Freddy
Both
Neither
Who has the comparative advantage in apples?
Billy
Freddy
Both
Neither
What should the terms for trade be to benefit BOTH Billy and Freddy?
8 Apples for 8 Bananas
8 Bananas for 6 Apples
7 Apples for 6 Bananas
None of the Above
If Billy and Freddy trade according to a mutual beneficial terms of trade, then which of the following must be true?
Nothing, Billy and Freddy would be better off by themselves.
Both Billy and Freddy would suffer from the trade.
Both Billy and Freddy can consume what they can produce.
If a PPC is produced for Apples and Bananas, this graph would shift right.
Based on the table, the nation's balance of payments is
$150 Million
$50 Million
$850 Million
$950 Million
Based on the table, the nation's Capital and Financial Account is in
Surplus
Deficit
Appreciation
Capital Outflow
If the price of the Dollar changes from 6 Yen per Dollar to 7 Yen per Dollar, describe the change to DOLLARS
Dollar: Appreciates
Dollar: Depreciates
Yen: Appreciates
Yen: Depreciates
With the change described in the table, what would happen to the value of the Yen (Japanese currency)?
Increases
Decreases
Which of the following must be true given the following table?
Goods are cheaper in the U.S. than in European Nations.
The Yen has depreciated
It takes more Euros to buy 1 Yen than Dollars
One Euro is worth 8/6 Dollars
What would be recorded in a country's capital and financial account?
Goods produced and consumed in the country
Foreign purchases of domestic goods
Domestic gain of interest of a foreign stock.
Foreign purchases of domestic bonds
Select ALL of the answers that may influence exchange rates
Changes in Consumer Taste
Relative Income Changes
Relative Price Changes
Relative Interest Rates
If foreign income increases, what is the most direct effect to Forex Graph for the domestic currency?
Demand Increases
(Domestic currency appreciates)
Demand Decreases
(Domestic currency depreciates)
Supply Increases
(Domestic currency depreciates)
Supply Decreases
(Domestic currency appreciates)
If the U.S. Government runs a budget deficit, what would happen to the value of the dollar?
Since Real Interest Rates increases, the dollar appreciates
Since Real Interest Rates increases, the dollar depreciates
Since Real Interest Rates decreases, the dollar appreciates
Since Real Interest Rates decreases, the dollar depreciates
What would happen to U.S. loanable funds market if Japan is running a contractionary monetary policy (assuming that they are in an open economy)?
Supply of Loanable Funds Decreases
Supply of Loanable Funds Increases
Demand of Loanable Funds Decreases
Demand of Loanable Funds Increases
If the domestic economy decreases its money supply, what would happend to the net exports, imports, and exports (Hint: use the loanable funds graph)
Net Exports: Increases
Exports: Increases
Imports: Decreases
Net Exports: Decreases
Exports: Decreases
Imports: Increases
Net Exports: Unknown
Exports: Unknown
Imports: Unknown
If both Nominal Interest Rate and the Rate of Inflation BOTH increase by 3%, what is the immediate effect on the value of the dollar? (Hint: Fisher Equation)
The Dollar would appreciate
The Dollar would depreciate
No Change to the value of the dollar.
If U.S. raises tariffs against Saudi Arabia, what is the immediate affect on the value of the Saudi Riyal?
Appreciate
Depreciate
Remains relatively constant
The U.S. and Japan are trading partners. If U.S. dollar depreciates relative to the Japanese Yen, which one of the following would happen?
Increased exports from Japan to the U.S.
Aggregate Demand in Japan would increase.
Aggregate Demand in U.S. would decreases.
The price level and output of the U.S. economy temporarily increases
How would the Capital and Financial Account in the U.S. change if the Federal Reserve is increasing the Reserve Requirement?
Cause capital outflow to the U.S.
Causes capital inflow to the U.S.
The Capital and Financial Account would have no change because there is no change to the Current Account
The Capital and Financial Account would have no change because this causes a demand shift on the market for loanable funds graph
