WorksheetsAP Macro Unit 6 Review
Total questions: 20
Worksheet time: 3600secs
All of the following are counted in a nation's current account (CA) except
$50,000 car imported from Italy
$500 of cheese exported from France
A $50 million Chinese factory purchased by a Canadian
$1 million donated in first aid supplies to Indonesia
$1,000 sent to Russia from a Russian working in the US
Which of the following would decrease the U.S. capital and financial account (CFA)?
A boat purchased by a British investment banker in Florida
A ski chateau purchased in Switzerland by an American entrepreneur
An American earns $1000 in the Japanese stock market
The purchase of $1000 of US Treasury bonds by a Chinese investor
The purchase of a foreign car by an American diplomat living in Costa Rica
Which of the following are included in a nation's balance of payments accounts?
I. International trading
II. International lending
III. Domestic investment
I, II, and III only
I and II only
I and III only
II and III only
I only
Which of the following is true regarding international trade
A country that exports more than it imports has a trade deficit
A country that exports more than 30% of their GDP has a trade surplus
A deficit in the current account is offset by a surplus in the capital and financial account
A country that exports more than it imports will have a financial account surplus
A country with a trade deficit will have a current account surplus
An increase in Korea’s demand for U.S. goods would cause the US dollar to
Depreciate because of inflation
Depreciate because the U.S. would be selling more dollars to Korea
Depreciate because the U.S. money supply would increase as exports rise
Appreciate because Korea would be buying more U.S. dollars
Appreciate because Korea would be selling more U.S. dollars
If the demand for the British Pound increases relative to the U.S. dollar, then the
US dollar would appreciate
Supply of US dollars would decrease
Quantity supplied of Pounds would decrease
British pound would appreciate
British pound will depreciate
Suppose incomes fall in the United States, but not in Japan. Which of the following will occur?
The US dollar will appreciate and the Japanese Yen will depreciate
The US dollar will appreciate and the Japanese Yen will appreciate
US imports from Japan will increase
The US dollar will depreciate and the Japanese Yen will appreciate
Japanese exports to the US will increase
Suppose price level increases more in the United States than it does in Indonesia. What is the short-run impact on U.S. net exports, the value of the U.S. dollar, and the value of the Indonesian rupee?
Net Exports / U.S. dollar / Indonesian rupee
Increase / depreciate / depreciate
Net Exports / U.S. dollar / Indonesian rupee
Decrease / depreciate / appreciate
Net Exports / U.S. dollar / Indonesian rupee
Increase / depreciate / appreciate
Net Exports / U.S. dollar / Indonesian rupee
Decrease / appreciate / depreciate
Net Exports / U.S. dollar / Indonesian rupee
Increase / appreciate / depreciate
Suppose interest rates fall in the United States, but they don't fall in Mexico. What is the short-run impact on the value of the U.S. dollar (USD) and the value of the Mexican Peso (Peso)?
USD / Peso
Appreciate / appreciate
USD / Peso
Appreciate / depreciate
USD / Peso
Depreciate / depreciate
USD / Peso
Depreciate / appreciate
USD / Peso
Depreciate / no change
An increase in a country’s interest rate relative to other country’s interest rate will most likely cause which of the following?
An decrease in the demand for the country’s currency
An increase in the supply of the country’s currency
The depreciation of the country’s currency
An increase in the amount of domestic investment
Capital inflow into the country to exceed capital outflow
Assume that the supply of loanable funds increases in Canada. The international value of Canada’s currency and Canada’s exports will most likely change in which of the following ways
Value of the Canadian Dollar Exports
Decrease Decrease
Value of the Canadian Dollar Exports
Decrease Increase
Value of the Canadian Dollar Exports
Increase Decrease
Value of the Canadian Dollar Exports
Increase Increase
Value of the Canadian Dollar Exports
Not change Not change
Which of the following is an example of direct foreign investment?
An increase in the demand for US dollars by foreigners
A decrease in the supply of US dollars by Americans
The purchase of American planed by a Mexican company
The sale of financial service to a foreign investor by a US bank
A Chinese company buying a microprocessor factory in Korea
An increase in net exports for country X will most likely be caused by which of the following?
An increase in consumer spending
An increase in direct foreign investment
A decrease in the international value of the currency in country X
An increase in the international value of the currency in country X
An increase in the price level in country X
All of the following are true regarding international trade except
Countries experience a trade deficit when imports are greater than exports
Net exports will increase when that country's currency depreciates
Exports are considered a debit in a country's balance of trade
The balance of payment is a summary of a country's transactions with other countries
The primary components of the balance of payments are the current account and the capital (financial)
Which of the following would definitely move a country toward a current account deficit?
An increase in exports
An increase in imports
An larger capital account deficit
An increase in capital outflow
A decrease in foreign aid provided to other countries
Which of the following is the best example of foreign direct investment?
The Chinese government buying United States Treasury bonds
A business in the United States selling machinery to a company in Japan
A United States citizen buying Mexican pesos.
The United States sending earthquake relief aid to Haiti
A Japanese software company buying a factory in the United States
The value of a country's currency relative to another country's currency is called
capital flow
purchasing-power parody
the inflation rate
the exchange rate appreciation
appreciation
If there is a large increase in the number of Europeans traveling to the United States while US citizens’ travel to Europe remains unchanged, which of the following is true
The euro will depreciate because the demand for euros will decrease
The euro will depreciate because the supply of euros will increase
The euro will appreciate because the demand for euros will increase
The dollar will appreciate because the demand of dollars will decrease
The dollar will appreciate because the supply of dollars will increase
Assume the inflation rate in Mexico is significantly higher than its trading partners. Which of the following will occur to the demand, supply, and international value of the Mexican Peso?
Demand Supply Value
Increase Increase Depreciate
Demand Supply Value
Increase Decrease Appreciate
Demand Supply Value
Decrease Increase Appreciate
Demand Supply Value
Decrease Increase Depreciate
Demand Supply Value
Decrease Decrease Depreciate
Assume the real interest rate in country X increases relative to other countries. What will happen to the value of the currency and net exports in country X?
Value of Currency Net exports
Appreciate Decrease
Value of Currency Net exports
Depreciate Increase
Value of Currency Net exports
Stay the Same Stay the Same
Value of Currency Net exports
Appreciate Increase
Value of Currency Net exports
Depreciate Decrease
