Question 1

In L. Frank Baum's classic 1900 children's book, The Wonderful Wizard of Oz, the name "oz" is a reference to

Accepted Answer

A)  an ounce (oz.) of gold. 
B)  an ounce (oz.) of silver. 
C)  an ounce (oz.) of copper. 
D)  an ounce (oz.) of gold or silver. 
E)  an ounce (oz.) of wheat. 
A)  an ounce (oz.) of gold. 
B)  an ounce (oz.) of silver. 
C)  an ounce (oz.) of copper. 
D)  an ounce (oz.) of gold or silver. 
E)  an ounce (oz.) of wheat.

Question 2

The mechanism behind the inflation insulation provided by a floating exchange rate is

Accepted Answer

A)  Purchasing Power Parity. 
B)  a fixed AA curve. 
C)  market speculation. 
D)  tight monetary policy. 
E)  symmetry. 
A)  Purchasing Power Parity. 
B)  a fixed AA curve. 
C)  market speculation. 
D)  tight monetary policy. 
E)  symmetry.

Question 3

Countries where investment is relatively

Accepted Answer

A)  productive should be net exporters of currently available output. 
B)  unproductive should be net importers of currently available output. 
C)  unproductive should be net exporters of currently available output. 
D)  unproductive should be net exporters of future available output. 
E)  unproductive should focus on their internal balance. 
A)  productive should be net exporters of currently available output. 
B)  unproductive should be net importers of currently available output. 
C)  unproductive should be net exporters of currently available output. 
D)  unproductive should be net exporters of future available output. 
E)  unproductive should focus on their internal balance.

Question 4

The IMF agreement forced the U.S. to exchange gold for dollars at what price?

Accepted Answer

A)  $25/ ounce 
B)  $35/ ounce 
C)  $45/ ounce 
D)  $55/ ounce 
E)  $20/ ounce 
A)  $25/ ounce 
B)  $35/ ounce 
C)  $45/ ounce 
D)  $55/ ounce 
E)  $20/ ounce

Question 5

A policy of "beggar-thy-neighbor" is a policy that

Accepted Answer

A)  often benefits the home country in the long run. 
B)  often benefits the foreign country in the long run. 
C)  often benefits the foreign country in the short run. 
D)  does not often benefit any country in the long run. 
E)  benefits the home country's neighbors in the long run. 
A)  often benefits the home country in the long run. 
B)  often benefits the foreign country in the long run. 
C)  often benefits the foreign country in the short run. 
D)  does not often benefit any country in the long run. 
E)  benefits the home country's neighbors in the long run.

Question 6

If central banks were no longer obliged to intervene in currency markets to fix exchange rates, governments would be able to use monetary policy to reach

Accepted Answer

A)  internal balance. 
B)  external balance. 
C)  internal and external balance. 
D)  internal but not external balance. 
E)  external but not internal balance. 
A)  internal balance. 
B)  external balance. 
C)  internal and external balance. 
D)  internal but not external balance. 
E)  external but not internal balance.

Question 7

-Refer to the above figure. Use the DD-AA model to examine and compare the response of an economy under fixed and floating exchange rate to a permanent fall in foreign demand for its exports.

Accepted Answer

The DD curve shifts to the left. Under f

Question 8

What are the components of the trilemma that is encountered when a country chooses its monetary policy and what is the meaning of the term?

Accepted Answer

The components are (1) exchange rates, (

Question 9

Countries where investment is

Accepted Answer

A)  relatively unproductive should have current account deficits. 
B)  relatively productive should have current account surpluses. 
C)  relatively productive should have current account deficits. 
D)  relatively productive should have balanced current accounts. 
E)  relatively unproductive should have balanced current accounts. 
A)  relatively unproductive should have current account deficits. 
B)  relatively productive should have current account surpluses. 
C)  relatively productive should have current account deficits. 
D)  relatively productive should have balanced current accounts. 
E)  relatively unproductive should have balanced current accounts.

Question 10

The collapse of the Bretton Woods system marked

Accepted Answer

A)  the end of floating exchange rates and a move to fixed exchange rates. 
B)  marked the end of fixed exchange rates and a move to floating exchange rates. 
C)  the beginning of the gold standard. 
D)  a plunge in the price of gold. 
E)  the elimination of paper currencies. 
A)  the end of floating exchange rates and a move to fixed exchange rates. 
B)  marked the end of fixed exchange rates and a move to floating exchange rates. 
C)  the beginning of the gold standard. 
D)  a plunge in the price of gold. 
E)  the elimination of paper currencies.

Question 11

Under fixed exchange rates, domestic asset transactions by the central bank

Accepted Answer

A)  can be used to alter the level of foreign reserves but not to affect the state of employment and output. 
B)  cannot be used to alter the level of foreign reserves but only to affect the state of employment and output. 
C)  can be used to alter the level of foreign reserves and to affect the state of employment and output. 
D)  can be used to alter the domestic money supply and the level of foreign reserves. 
E)  can raise output to full-employment level. 
A)  can be used to alter the level of foreign reserves but not to affect the state of employment and output. 
B)  cannot be used to alter the level of foreign reserves but only to affect the state of employment and output. 
C)  can be used to alter the level of foreign reserves and to affect the state of employment and output. 
D)  can be used to alter the domestic money supply and the level of foreign reserves. 
E)  can raise output to full-employment level.

Question 12

Refer to the graph below, which shows the effect of ________ on the home economy.

Accepted Answer

A)  foreign inflation 
B)  domestic inflation 
C)  foreign deflation 
D)  domestic recession 
E)  foreign recession 
A)  foreign inflation 
B)  domestic inflation 
C)  foreign deflation 
D)  domestic recession 
E)  foreign recession

Question 13

The DD schedule shows

Accepted Answer

A)  interest rate and output pairs for which aggregate demand equals aggregate output. 
B)  exchange rate and output pairs for which aggregate demand equals aggregate output. 
C)  exchange rate and output pairs for which aggregate supply equals aggregate output. 
D)  interest rate and output pairs for which aggregate supply equals aggregate output. 
E)  exchange rate and output pairs for which aggregate demand is greater than aggregate output. 
A)  interest rate and output pairs for which aggregate demand equals aggregate output. 
B)  exchange rate and output pairs for which aggregate demand equals aggregate output. 
C)  exchange rate and output pairs for which aggregate supply equals aggregate output. 
D)  interest rate and output pairs for which aggregate supply equals aggregate output. 
E)  exchange rate and output pairs for which aggregate demand is greater than aggregate output.

In L. Frank Baum's classic 1900 children's book, The Wonderful Wizard of Oz, the name "oz" is a reference to

The mechanism behind the inflation insulation provided by a floating exchange rate is

Countries where investment is relatively

The IMF agreement forced the U.S. to exchange gold for dollars at what price?

A policy of "beggar-thy-neighbor" is a policy that

If central banks were no longer obliged to intervene in currency markets to fix exchange rates, governments would be able to use monetary policy to reach

-Refer to the above figure. Use the DD-AA model to examine and compare the response of an economy under fixed and floating exchange rate to a permanent fall in foreign demand for its exports.

What are the components of the trilemma that is encountered when a country chooses its monetary policy and what is the meaning of the term?

Countries where investment is

The collapse of the Bretton Woods system marked

Under fixed exchange rates, domestic asset transactions by the central bank

Refer to the graph below, which shows the effect of ________ on the home economy.

The DD schedule shows

Introduction

World Trade: an Overview

Labor Productivity and Comparative Advantage: the Ricardian Model

Specific Factors and Income Distribution

Resources and Trade: the Heckscher-Ohlin Model

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Controversies in Trade Policy

National Income Accounting and the Balance of Payments

Exchange Rates and the Foreign Exchange Market: an Asset Approach

Money, Interest Rates, and Exchange Rates

Price Levels and the Exchange Rate in the Long Run

Output and the Exchange Rate in the Short Run

Fixed Exchange Rates and Foreign Exchange Intervention

Financial Globalization: Opportunity and Crisis

Optimum Currency Areas and the Euro

Developing Countries: Growth, Crisis, and Reform

Filters

Exam 19: International Monetary Systems: an Historical Overview

In L. Frank Baum's classic 1900 children's book, The Wonderful Wizard of Oz, the name "oz" is a reference to

The mechanism behind the inflation insulation provided by a floating exchange rate is

Countries where investment is relatively

The IMF agreement forced the U.S. to exchange gold for dollars at what price?

A policy of "beggar-thy-neighbor" is a policy that

If central banks were no longer obliged to intervene in currency markets to fix exchange rates, governments would be able to use monetary policy to reach

-Refer to the above figure. Use the DD-AA model to examine and compare the response of an economy under fixed and floating exchange rate to a permanent fall in foreign demand for its exports.

What are the components of the trilemma that is encountered when a country chooses its monetary policy and what is the meaning of the term?

Countries where investment is

The collapse of the Bretton Woods system marked

Under fixed exchange rates, domestic asset transactions by the central bank

Refer to the graph below, which shows the effect of ________ on the home economy.

The DD schedule shows

Introduction

World Trade: an Overview

Labor Productivity and Comparative Advantage: the Ricardian Model

Specific Factors and Income Distribution

Resources and Trade: the Heckscher-Ohlin Model

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Controversies in Trade Policy

National Income Accounting and the Balance of Payments

Exchange Rates and the Foreign Exchange Market: an Asset Approach

Money, Interest Rates, and Exchange Rates

Price Levels and the Exchange Rate in the Long Run

Output and the Exchange Rate in the Short Run

Fixed Exchange Rates and Foreign Exchange Intervention

Financial Globalization: Opportunity and Crisis

Optimum Currency Areas and the Euro

Developing Countries: Growth, Crisis, and Reform

Filters