Question 1

Which nations make up the G8?

Accepted Answer

Canada,France,German

Question 2

Along the aggregate supply curve

Accepted Answer

A) the horizontal part represents a situation where the economy is operating above full employment levels. 
B) inflation would be a primary concern along the horizontal part of the aggregate supply curve. 
C) the horizontal section of the aggregate supply curve represents the limit of production. 
D) the middle, upward-sloping part of the aggregate supply curve would be associated with a growing economy that experienced increased prices from resources that are becoming relatively scarce. 
A) the horizontal part represents a situation where the economy is operating above full employment levels. 
B) inflation would be a primary concern along the horizontal part of the aggregate supply curve. 
C) the horizontal section of the aggregate supply curve represents the limit of production. 
D) the middle, upward-sloping part of the aggregate supply curve would be associated with a growing economy that experienced increased prices from resources that are becoming relatively scarce.

Question 3

An example of expansionary fiscal policy would be

Accepted Answer

A) a decrease in government spending to reduce budget deficits. 
B) an increase in tax collection to reduce budget deficits. 
C) a decrease in interest rates to help stimulate the economy. 
D) an increase in government spending on infrastructure to create jobs and improve the economy. 
A) a decrease in government spending to reduce budget deficits. 
B) an increase in tax collection to reduce budget deficits. 
C) a decrease in interest rates to help stimulate the economy. 
D) an increase in government spending on infrastructure to create jobs and improve the economy.

Question 4

If a currency rapidly depreciates,what are the possible negative results to the economy of using contractionary monetary policy to address the depreciation?

Accepted Answer

National income fall

Question 5

Which of the following is NOT a likely goal of macroeconomic coordination between nations?

Accepted Answer

A) Reducing trade barriers 
B) Achieving a desirable level of world economic growth 
C) Avoiding a global economic crisis 
D) Correcting global economic imbalances 
A) Reducing trade barriers 
B) Achieving a desirable level of world economic growth 
C) Avoiding a global economic crisis 
D) Correcting global economic imbalances

Question 6

Assume that aggregate supply meets aggregate demand in the upward sloping portion of the AS curve.For each of the following,graph the change in aggregate supply and/or aggregate demand,and state the effect on prices and output.
1. The demand for U.S.exports increases.
2. Taxes increase.
3. Businesses become less optimistic about the future.
4. The labor force increases.
5. Costs of production increase.

Accepted Answer

1. Aggregate demand increases; prices an

Question 7

All of the following took place during the Great Depression except

Accepted Answer

A) an increase in unemployment from about 3.4 percent to about 25 percent and a decrease in real GDP by about 30 percent between 1929 in 1933. 
B) an increase in taxes because of the fear that budget deficits would undermine business confidence. 
C) a fall in the money supply by more than 30 percent. 
D) a rise in inflation during the early 1930s. 
A) an increase in unemployment from about 3.4 percent to about 25 percent and a decrease in real GDP by about 30 percent between 1929 in 1933. 
B) an increase in taxes because of the fear that budget deficits would undermine business confidence. 
C) a fall in the money supply by more than 30 percent. 
D) a rise in inflation during the early 1930s.

Question 8

An increase in interest rates causes that nation to experience an outflow of financial capital and causes its currency to depreciate.

Accepted Answer

A) True 
 B)False

Question 9

Economic growth would be illustrated by

Accepted Answer

A) a rightward shift of aggregate demand. 
B) a leftward shift of aggregate demand. 
C) a rightward shift of aggregate supply. 
D) a leftward shift of aggregate supply. 
A) a rightward shift of aggregate demand. 
B) a leftward shift of aggregate demand. 
C) a rightward shift of aggregate supply. 
D) a leftward shift of aggregate supply.

Question 10

If interest rates rise,what will happen to the nation's exchange rate?

Accepted Answer

The answer of If interest rates rise,what will happen to...

Question 11

Starting from a balanced budget,which of the following would NOT cause a government budget deficit?

Accepted Answer

A) A decrease in taxes 
B) An increase in spending of goods and services 
C) An increase in transfer payments 
D) A 50 percent increase in spending accompanied by a 50 percent increase in taxes 
A) A decrease in taxes 
B) An increase in spending of goods and services 
C) An increase in transfer payments 
D) A 50 percent increase in spending accompanied by a 50 percent increase in taxes

Question 12

When aggregate demand meets aggregate supply in the vertical portion of the aggregate supply curve,

Accepted Answer

A) an increase in demand will cause prices to rise but no change in output. 
B) an increase in demand will cause output to rise but no change in prices. 
C) an increase in demand will cause prices to fall but no change in output. 
D) an increase in demand will cause output to fall but no change in prices. 
A) an increase in demand will cause prices to rise but no change in output. 
B) an increase in demand will cause output to rise but no change in prices. 
C) an increase in demand will cause prices to fall but no change in output. 
D) an increase in demand will cause output to fall but no change in prices.

Question 13

Contractionary fiscal policy can lead to a depreciation of the nation's currency.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is an advantage of monetary policy?

Accepted Answer

A) It is faster to implement than fiscal policy. 
B) It acts more directly upon aggregate demand than fiscal policy. 
C) It is not subject to multiplier effects. 
D) It is unlikely to create inflation. 
A) It is faster to implement than fiscal policy. 
B) It acts more directly upon aggregate demand than fiscal policy. 
C) It is not subject to multiplier effects. 
D) It is unlikely to create inflation.

Question 15

If a component of aggregate demand increases,

Accepted Answer

A) GDP in the United States is likely to increase less than that component of spending increased. 
B) GDP in the United States is likely to increase more than that component of spending increased. 
C) GDP in the United States is likely to decrease. 
D) GDP in the United States will not change. 
A) GDP in the United States is likely to increase less than that component of spending increased. 
B) GDP in the United States is likely to increase more than that component of spending increased. 
C) GDP in the United States is likely to decrease. 
D) GDP in the United States will not change.

Question 16

Expenditure-switching policies designed to improve a current account deficit

Accepted Answer

A) turn domestic spending towards domestic goods. 
B) reduce the overall level of demand in the economy. 
C) turn domestic spending towards foreign goods. 
D) increase the overall level of demand in the economy. 
A) turn domestic spending towards domestic goods. 
B) reduce the overall level of demand in the economy. 
C) turn domestic spending towards foreign goods. 
D) increase the overall level of demand in the economy.

Question 17

Used alone,an expenditure-reducing policy that lowers aggregate demand

Accepted Answer

A) will not reduce the current account deficit. 
B) is likely to cause a recession. 
C) will be likely to increase the current account deficit. 
D) is likely to increase domestic inflation. 
A) will not reduce the current account deficit. 
B) is likely to cause a recession. 
C) will be likely to increase the current account deficit. 
D) is likely to increase domestic inflation.

Question 18

If aggregate supply meets aggregate demand in the vertical part of the AS curve,which of the following is a true statement about expansionary policies?

Accepted Answer

A) Monetary policy will be more effective in increasing output. 
B) Fiscal policy will be more effective in increasing output. 
C) Fiscal and monetary policy will be equally effective in increasing output. 
D) Both monetary and fiscal policies will only cause prices to increase. 
A) Monetary policy will be more effective in increasing output. 
B) Fiscal policy will be more effective in increasing output. 
C) Fiscal and monetary policy will be equally effective in increasing output. 
D) Both monetary and fiscal policies will only cause prices to increase.

Question 19

Explain why macroeconomic policies that are coordinated can enhance economic growth,but why policies that are not coordinated can increase global imbalances.

Accepted Answer

If a group of industrial economies decid

Question 20

Which of the following may NOT serve as a possible chain reaction for either fiscal or monetary policy?

Accepted Answer

A) G↑ ⇒ Y↑ ⇒ C↑ ⇒ Y↑ ⇒ C↑.... 
B) T↓ ⇒ Y↑ ⇒ C↑ ⇒ Y↑ ⇒ C↑.... 
C) M↑ ⇒ i↓ ⇒ I↓ ⇒ Y↓ ⇒ C↓.... 
D) M↑ ⇒ i↓ ⇒ I↑ ⇒ Y↑ ⇒ C↑.... 
A) G↑ ⇒ Y↑ ⇒ C↑ ⇒ Y↑ ⇒ C↑.... 
B) T↓ ⇒ Y↑ ⇒ C↑ ⇒ Y↑ ⇒ C↑.... 
C) M↑ ⇒ i↓ ⇒ I↓ ⇒ Y↓ ⇒ C↓.... 
D) M↑ ⇒ i↓ ⇒ I↑ ⇒ Y↑ ⇒ C↑....

Which nations make up the G8?

Along the aggregate supply curve

An example of expansionary fiscal policy would be

If a currency rapidly depreciates,what are the possible negative results to the economy of using contractionary monetary policy to address the depreciation?

Which of the following is NOT a likely goal of macroeconomic coordination between nations?

All of the following took place during the Great Depression except

An increase in interest rates causes that nation to experience an outflow of financial capital and causes its currency to depreciate.

Economic growth would be illustrated by

If interest rates rise,what will happen to the nation's exchange rate?

Starting from a balanced budget,which of the following would NOT cause a government budget deficit?

When aggregate demand meets aggregate supply in the vertical portion of the aggregate supply curve,

Contractionary fiscal policy can lead to a depreciation of the nation's currency.

Which of the following is an advantage of monetary policy?

If a component of aggregate demand increases,

Expenditure-switching policies designed to improve a current account deficit

Used alone,an expenditure-reducing policy that lowers aggregate demand

If aggregate supply meets aggregate demand in the vertical part of the AS curve,which of the following is a true statement about expansionary policies?

Explain why macroeconomic policies that are coordinated can enhance economic growth,but why policies that are not coordinated can increase global imbalances.

Which of the following may NOT serve as a possible chain reaction for either fiscal or monetary policy?

The United States in a Global Economy

International Economic Institutions Since World War II

Comparative Advantage and the Gains From Trade

Comparative Advantage and Factor Endowments

Beyond Comparative Advantage

The Theory of Tariffs and Quotas

Commercial Policy

International Trade and Labor and Environmental Standards

Trade and the Balance of Payments

Exchange Rates and Exchange Rate Systems

International Financial Crises

The United States in the World Economy

The European Union: Many Markets Into One

Trade and Policy Reform in Latin America

Export-Oriented Growth in East Asia

China and India in the World Economy

Filters

Exam 11: An Introduction to Open Economy Macroeconomics

Which nations make up the G8?

Along the aggregate supply curve

An example of expansionary fiscal policy would be

If a currency rapidly depreciates,what are the possible negative results to the economy of using contractionary monetary policy to address the depreciation?

Which of the following is NOT a likely goal of macroeconomic coordination between nations?

All of the following took place during the Great Depression except

An increase in interest rates causes that nation to experience an outflow of financial capital and causes its currency to depreciate.

Economic growth would be illustrated by

If interest rates rise,what will happen to the nation's exchange rate?

Starting from a balanced budget,which of the following would NOT cause a government budget deficit?

When aggregate demand meets aggregate supply in the vertical portion of the aggregate supply curve,

Contractionary fiscal policy can lead to a depreciation of the nation's currency.

Which of the following is an advantage of monetary policy?

If a component of aggregate demand increases,

Expenditure-switching policies designed to improve a current account deficit

Used alone,an expenditure-reducing policy that lowers aggregate demand

If aggregate supply meets aggregate demand in the vertical part of the AS curve,which of the following is a true statement about expansionary policies?

Explain why macroeconomic policies that are coordinated can enhance economic growth,but why policies that are not coordinated can increase global imbalances.

Which of the following may NOT serve as a possible chain reaction for either fiscal or monetary policy?

The United States in a Global Economy

International Economic Institutions Since World War II

Comparative Advantage and the Gains From Trade

Comparative Advantage and Factor Endowments

Beyond Comparative Advantage

The Theory of Tariffs and Quotas

Commercial Policy

International Trade and Labor and Environmental Standards

Trade and the Balance of Payments

Exchange Rates and Exchange Rate Systems

International Financial Crises

The United States in the World Economy

The European Union: Many Markets Into One

Trade and Policy Reform in Latin America

Export-Oriented Growth in East Asia

China and India in the World Economy

Filters