WorksheetsVĩ mô p2
Total questions: 86
Worksheet time: 1hrs 26mins
Foreign-produced goods and services that are purchased domestically are called
imports.
exports
net imports
net exports
When Claudia, a U.S. citizen, purchases a handbag made in France, the purchase is
both a U.S and French import
a U.S export and a French import
a U.S import and a French export
neither an export nor an import for either country
A country's trade balance
must be zero.
must be greater than zero.
is greater than zero only if exports are greater than imports.
is greater than zero only if imports are greater than exports.
The value of Peru's exports minus the value of Peru's imports is called
Peru's foreign portfolio investment.
Peru's foreign direct investment.
Peru's net exports. NX=EXPORT- IMPORT
Peru's net imports.
If Germany purchased more goods and services abroad than it sold abroad last year, then it had
positive net exports which is a trade surplus.
positive net exports which is a trade deficit.
negative net exports which is a trade surplus.
negative net exports which is a trade deficit
You buy a new car built in Sweden. Other things the same, your purchase by itself
raises both Vietnam’s exports and Vietnam’s net exports
raises Vietnam’s import and lowers Vietnam net exports.
raises both Vietnam imports and Vietnam net exports.
raises Vietnam’s imports and Vietnam’s U.S. net exports
Net capital outflow (NCO) is defined as the purchase of
foreign assets by domestic residents minus the purchase of domestic assets by foreign residents.
foreign assets by domestic residents minus the purchase of foreign goods and services by domestic residents
domestic assets by foreign residents minus the purchase of domestic goods and services by foreign residents
domestic assets by foreign residents minus the purchase of foreign assets by domestic residents
Net capital outflow measures
foreign assets held by domestic residents minus domestic assets held by foreign residents.
the imbalance between the amount of foreign assets bought by domestic residents and the amount of domestic assets bought by foreigners.
the imbalance between the amount of foreign assets bought by domestic residents and the amount of domestic goods and services sold to foreigners.
None of the above is correct.
Net capital outflow equals
the purchase of foreign assets by domestic residents.
the purchase of domestic assets by foreign residents.
the purchase of domestic assets by foreign residents - the purchase of foreign assets by domestic residents
the purchase of foreign assets by domestic residents - the purchase of domestic assets by foreign residents
An open economy's GDP is always given by
Y = C + I + G.
Y = C + I + G + T.
Y = C + I + G + S.
Y = C + I + G + NX.
Which of the following equations is always correct in an open economy?
I = Y - C
I = S
I = S - NCO
I = S + NX
Which of the following is correct?
NCO + C = NX
NCO = NX
NX - NCO = C
NX + NCO = C
If a country has a trade surplus
it has positive net exports and positive net capital outflow.
it has positive net exports and negative net capital outflow.
it has negative net exports and positive net capital outflow.
it has negative net exports and negative net capital outflow.
If a country has a trade deficit
it has positive net exports and positive net capital outflow
it has positive net exports and negative net capital outflow.
it has negative net exports and positive net capital outflow.
it has negative net exports and negative net capital outflow.
If a country has a trade surplus, then its
saving is greater than domestic investment and Y > C + I + G.
saving is greater than domestic investment and Y < C + I + G.
saving is less than domestic investment and Y > C +I + G.
saving is less than domestic investment and Y < C + I + G.
The nominal exchange rate is the
nominal interest rate in one country divided by the nominal interest rate in the other country.
the ratio of a foreign country’s interest rate to the domestic interest rate.
rate at which a person can trade the currency of one country for another.
the real exchange rate minus the inflation rate.
If the exchange rate were 5 Egyptian pounds per U.S. dollar, a watch that costs $25 US dollars would cost
125 Egyptian pounds
50 Egyptian pounds
5 Egyptian pounds
None of the above is correct.
Other things the same, if the dollar depreciates (khấu hao,giảm sút giá trị) relative to the Japanese yen, then
the exchange rate falls. It will cost fewer yen to travel in the U.S.
the exchange rate falls. It will cost more yen to travel in the U.S.
the exchange rate rises. It will cost fewer yen to travel in the U.S.
the exchange rate rises. It will cost more yen to travel in the U.S.
Other things the same, if the dollar appreciates relative to the Japanese yen, then
the exchange rate falls. It will cost fewer yen to travel in the U.S.
the exchange rate falls. It will cost more yen to travel in the U.S.
the exchange rate rises. It will cost fewer yen to travel in the U.S.
the exchange rate rises. It will cost more yen to travel in the U.S.
If you are vacationing in France and the dollar depreciates relative to the euro, then
the dollar buys more euros. It will take fewer dollars to buy a good that costs 50 euros
the dollar buys more euros. It will take more dollars to buy a good that costs 50 euros.
the dollar buys fewer euros. It will take fewer dollars to buy a good that costs 50 euros.
the dollar buys fewer euros. It will take more dollars to buy a good that costs 50 euros.
Other things the same, if the exchange rate changes from 30 Thai bhat per dollar to 25 Thai bhat per dollar, then the dollar has
appreciated and so buys more Thai goods.
appreciated and so buys fewer Thai goods.
depreciated and so buys more Thai goods.
depreciated and so buys fewer Thai goods.
Other things the same, if the exchange rate changes from .30 Kuwaiti dinar per dollar to .35 Kuwaiti dinar per dollar, then the dollar has
appreciated and so buys more Kuwaiti goods.
appreciated and so buys fewer Kuwaiti goods.
depreciated and so buys more Kuwaiti goods.
depreciated and so buys fewer Kuwaiti goods.
If a dollar currently purchases 12.5 pesos and someone forecasts that in a year it will be 14 pesos, then the forecast is given in
real terms and implies the dollar will appreciate.
real terms and implies the dollar will depreciate.
nominal terms and implies the dollar will appreciate.
nominal terms and implies the dollar will depreciate.
According to classical macroeconomic theory, changes in the money supply affect
nominal variables and real variables.
nominal variables, but not real variables.
real variables, but not nominal variables.
neither nominal nor real variables.
The classical model is appropriate for analysis of the economy in the
long run, since evidence indicates that money is not neutral in the long run.
long run, since real and nominal variables are essentially determined separately in the long run.
short run, provided money is not neutral.
short run, provided real and nominal variables are highly intertwined.
Most economists believe that classical macroeconomic theory is a good description of the economy
in neither the short nor long run.
in the short run and in the long run.
in the short run, but not in the long run.
in the long run, but not in the short run.
Most economists believe that money neutrality holds
in the short run but not the long run.
in the long run but not the short run.
in both the short run and the long run.
in neither the short run nor the long run.
Most economists believe that in the long run, changes in the money supply
affect nominal but not real variables. This view that money is ultimately neutral is consistent with classical theory.
affect nominal but not real variables. This view that money is ultimately neutral is inconsistent with classical theory.
affect real but not nominal variables. This view that money is ultimately neutral is consistent with classical theory.
affect real but not nominal variables. This view that money is ultimately neutral is inconsistent with classical theory
The model of short-run economic fluctuations focuses on the price level and
real GDP.
economic growth.
the neutrality of money.
None of the above is correct
When looking at a graph of aggregate demand, which of the following is correct?
There are nominal variables on both the vertical (trục tung y) and the horizontal (trục hoành) axes.
There are real variables on both the vertical and horizontal axes.
The variable on the vertical axis is nominal; the variable on the horizontal axis is real
The variable on the vertical axis is real; the variable on the horizontal axis is nominal
When looking at a graph of aggregate demand, which of the following is correct?
There are nominal variables on both the vertical (trục tung y) and the horizontal (trục hoành) axes.
There are real variables on both the vertical and horizontal axes.
The variable on the vertical axis is nominal; the variable on the horizontal axis is real
The variable on the vertical axis is real; the variable on the horizontal axis is nominal
The average price level is measured by
any real variable.
the rate of inflation.
the level of the money supply
the CPI or the GDP deflator.
The aggregate demand and aggregate supply graph has
quantity of output on the horizontal axis. Output can be measured by the GDP deflator.
quantity of output on the horizontal axis. Output can be measured by real GDP.
quantity of output on the vertical axis. Output can be measured by the GDP deflator.
quantity of output on the vertical axis. Output can be measured by real GDP.
The aggregate-demand curve shows the
quantity of labor and other inputs that firms want to buy at each price level.
quantity of labor and other inputs that firms want to buy at each inflation rate.
quantity of domestically produced goods and services that households want to buy at each price level.
quantity of domestically produced goods and services that households, firms, the government, and customers abroad want to buy at each price level.
The model of aggregate demand and aggregate supply explains the relationship between
the price and quantity of a particular good.
unemployment and output.
wages and employment.
real GDP and the price level.
Aggregate demand includes
both the quantity of goods and services the government and customers abroad want to buy.
neither the quantity of goods and services the government wants to buy nor the quantity of goods and services customers abroad want to buy.
the quantity of goods and service the government wants to buy, but not the quantity of goods and services customers abroad want to buy.
the quantity of goods and services customers abroad want to buy, but not the quantity of goods and services the government wants to buy.
When taxes decrease, consumption
decreases as shown by a movement to the left along a given aggregate-demand curve.
decreases as shown by a shift of the aggregate demand curve to the left.
increases as shown by a movement to the right along a given aggregate-demand curve.
increases as shown by a shift of the aggregate demand curve to the right.
When taxes increase, consumption
decreases as shown by a movement to the left along a given aggregate-demand curve.
decreases as shown by a shift of the aggregate demand curve to the left.
increases as shown by a movement to the right along a given aggregate-demand curve.
increases as shown by a shift of the aggregate demand curve to the right
Other things the same, an increase in the amount of capital firms wish to purchase would initially shift
aggregate demand right.
aggregate demand left.
aggregate supply right.
aggregate supply left.
When the money supply increases
interest rates fall and so aggregate demand shifts right.
interest rates fall and so aggregate demand shifts left.
interest rates rise and so aggregate demand shifts right.
interest rates rise and so aggregate demand shifts left.
Which of the following shifts aggregate demand to the right?
Congress reduces purchases of new weapons systems.
Congress reduces purchases of new weapons systems.
The price level falls.
Net exports fall.
Which of the following is not a determinant of the long-run level of real GDP?
the price level
the supply of labor
available natural resources
available technology
The long-run aggregate supply curve would shift right if immigration from abroad
increased or Congress made a substantial increase in the minimum wage.
decreased or Congress abolished the minimum wage.
decreased or Congress abolished the minimum wage.
decreased or Congress made a substantial increase in the minimum wage.
Which of the following shifts long-run aggregate supply right?
an increase in either the physical or human capital stock
an increase in the human but not the physical capital stock
an increase in the physical capital stock, but no the human capital stock
neither an increase in the physical capital stock or the human capital stock
An increase in the expected price level shifts the
short-run and long-run aggregate supply curves left.
the short-run but not the long-run aggregate supply curve left.
the long-run but not the short-run aggregate supply curve left.
neither the long-run nor the short-run aggregate supply curve left.
Which of the following shifts short-run aggregate supply left?
an increase in the actual price level
an increase in the expected price level
an increase in the capital stock
None of the above is correct.
Which of the following shifts the short-run aggregate supply curve to the right?
an increase in the money supply
an increase in the price level
a decrease in the expected price level
All of the above are correct.
If the central bank decided to lower interest rates, it could
buy bonds to lower the money supply.
buy bonds to raise the money supply.
sell bonds to lower the money supply.
sell bonds to raise the money supply.
Which of the following shifts aggregate demand to the right?
an increase in the price level
an increase in the money supply
a decrease in the price level
a decrease in the money supply
If the central bank conducts open-market sales, the money supply
increases and aggregate demand shifts right.
increases and aggregate demand shifts left.
decreases and aggregate demand shifts right.
decreases and aggregate demand shifts left.
Open-market purchases
increase investment and real GDP
decrease investment and increase real GDP.
increase investment and decrease real GDP
decrease investment and real GDP.
The central bank can influence the money supply by
changing how much it lends to banks.
changing the interest rate it pays banks on the reserves they are holding.
using open-market operations.
All of the above are correct.
Fiscal policy refers to the idea that aggregate demand is affected by changes in
the money supply.
government spending and taxes.
trade policy.
All of the above are correct.
Government purchases are said to have a
multiplier effect on aggregate supply.
multiplier effect on aggregate demand.
liquidity-enhancing effect on aggregate supply.
liquidity-enhancing effect on aggregate demand.
Which of the following policy actions shifts the aggregate-demand curve?
an increase in the money supply
an increase in taxes
an increase in government spending
All of the above are correct.
An increase in government spending initially and primarily shifts
aggregate demand to the right.
aggregate demand to the left.
aggregate supply to the right.
neither aggregate demand nor aggregate supply in either direction.
The term crowding-out effect refers to
the reduction in aggregate supply that results when a monetary expansion causes the interest rate to decrease.
the reduction in aggregate demand that results when a monetary expansion causes the interest rate to decrease.
the reduction in aggregate demand that results when a fiscal expansion causes the interest rate to increase.
the reduction in aggregate demand that results when a decrease in government spending or an increase in taxes causes the interest rate to increase.
An increase in government spending investment
increases the interest rate and so investment spending increases.
increases the interest rate and so investment spending decreases.
decreases the interest rate and so increases investment spending increases.
decreases the interest rate and so investment spending decreases.
Assuming no crowding-out, investment-accelerator, or multiplier effects, a $100 billion increase in government expenditures shifts aggregate demand
right by more than $100 billion.
right by $100 billion.
left by more than $100 billion.
left by $100 billion.
In a system of 100-percent-reserve banking,
banks do not make loans.
currency is the only form of money.
deposits are banks’ only assets
All of the above are correct.
Commodity money is
backed by gold.
the principal type of money in use today.
money with intrinsic value.
receipts created in international trade that are used as a medium of exchange.
The primary difference between commodity money and fiat money is that
commodity money is a medium of exchange but fiat money is not.
fiat money is a medium of exchange but commodity money is not.
commodity money has intrinsic value but fiat money does not.
fiat money has intrinsic value but commodity money does not.
Which of the following would cause prices to rise and real GDP to fall in the short run?
an increase in the expected price level
an increase in the capital stock
an increase in the quantity of labor available
All of the above are correct
Which of the following will reduce the price level and real output in the short run?
an increase in the money supply
an increase in oil prices
a decrease in the money supply
technical progress
In a 100-percent-reserve banking system, if a customer deposits $100 of currency into a bank, then the money supply:
increases by $100.
decreases by $100.
increases by more than $100.
remains the same.
When a pizza maker lists the price of a pizza as $10, this is an example of using money as a:
store of value.
unit of account.
medium of exchange.
flow of value.
Which of the following correctly explains the crowding-out effect?
An increase in government expenditures decreases the interest rate and so increases investment spending.
An increase in government expenditures increases the interest rate and so reduces investment spending.
A decrease in government expenditures increases the interest rate and so increases investment spending.
A decrease in government expenditures decreases the interest rate and so reduces investment spending.
Aggregate demand shifts left when the government?
decreases taxes
cuts military expenditures
creates a new investment tax credit
None of the above is correct
The long-run effect of an increase in government spending is to raise
both real output and the price level
real output and lower the price level
real output and leave the price level unchanged.
the price level and leave real output unchanged
In the graph of the money market, the money supply curve is
vertical. It shifts rightward if central bank buys bonds
vertical. It shifts rightward if central bank sells bonds.
upward sloping. It shifts rightward if central bank buys bonds.
upward sloping. It shifts rightward if central bank sells bonds
If the MPC = 0.85, then the government purchases multiplier is about
1.18
3.33
6.67
8.5
Which of the following shifts short-run aggregate supply left?
an increase in the actual price level
an increase in the expected price level
an increase in the capital stock
None of the above is correct.
Government purchases are said to have a
multiplier effect on aggregate supply.
multiplier effect on aggregate demand.
liquidity-enhancing effect on aggregate supply.
liquidity-enhancing effect on aggregate demand.
The multiplier for changes in government spending is calculated as
MPC
1 - MPC
1/MPC
1/(1 - MPC)
An increase in government spending shifts aggregate demand
to the right. The larger the multiplier is, the farther it shifts
to the right. The larger the multiplier is, the less it shifts
to the right. The larger the multiplier is, the less it shifts
to the left. The larger the multiplier is, the less it shifts
The money supply increases when the central bank
lowers the discount rate. The increase will be larger the smaller the reserve ratio is.
lowers the discount rate. The increase will be larger the larger the reserve ratio is
raises the discount rate. The increase will be larger the smaller the reserve ratio is.
raises the discount rate. The increase will be larger the larger the reserve ratio is
If you hear in the news that the central bank conducted open-market purchases, then you should expect ______ to increase.
reserve requirements
the discount rate
the money supply
the reserve–deposit ratio
The sticky-price theory implies that
the short-run aggregate-supply curve is upward-sloping.
an unexpected fall in the price level induces firms to reduce the quantity of goods and services they produce.
menu costs influence the speed of adjustment of prices.
All of the above are correct.
Which of the following central bank actions would both increase the money supply?
buy bonds and raise the reserve requirement
buy bonds and lower the reserve requirement
sell bonds and raise the reserve requirement
sell bonds and lower the reserve requirement
The discount rate is the interest rate that
banks charge one another for loans.
banks charge central bank for loans
central bank charges banks for loans.
central bank charges Congress for loans.
Which of the following shifts aggregate demand to the right?
an increase in the price level
an increase in the money supply
a decrease in the price level
a decrease in the money supply
Which of the following will shift the aggregate supply curve up to the left?
an increase in the price level
a decrease in the level of output
an increase in the expected price level
a decrease in the price level
Fiat money
has no intrinsic value
is backed by gold
is a medium of exchange but not a unit of account
is any close substitute for currency such as checkable deposits
Which of the following would increase output in the short run?
an increase in stock prices makes people feel wealthier
government spending increases
firms chose to purchase more investment goods
All of the above are correct
If the central bank wishes to increase the money supply, it should:
decrease the discount rate
increase interest paid on reserves
sell government bonds
decrease the monetary base
To decrease the interest rate central bank could
buy bonds. The fall in the interest rate would increase investment spending.
buy bonds. The fall in the interest rate would decrease investment spending
sell bonds. The fall in the interest rate would increase investment spending
sell bonds. The fall in the interest rate would decrease investment spending.
