Question 1

Which approach to balance-of-payments adjustment suggests that balance-of-payments surpluses are the result of excess money demand in the home country?

Accepted Answer

A)  Absorption approach 
B)  Elasticities approach 
C)  Monetary approach 
D)  Purchasing-power-parity approach 
A)  Absorption approach 
B)  Elasticities approach 
C)  Monetary approach 
D)  Purchasing-power-parity approach

Question 2

Table 13.1.Canada's Saving,Investment,Import,and Export Functions (in billions of dollars)Under a System of Fixed Exchange Rates
  
-Referring to Table 13.1,Canada's foreign trade multiplier equals:

Accepted Answer

A)  1.75 
B)  2.05 
C)  2.22 
D)  2.64 
A)  1.75 
B)  2.05 
C)  2.22 
D)  2.64

Question 3

Under the gold standard,a deficit nation facing a gold outflow and a decrease in its money supply would also experience a:

Accepted Answer

A)  Rise in its interest rate and a short-term financial inflow 
B)  Rise in its interest rate and a short-term financial outflow 
C)  Fall in its interest rate and a short-term financial inflow 
D)  Fall in its interest rate and a short-term financial outflow 
A)  Rise in its interest rate and a short-term financial inflow 
B)  Rise in its interest rate and a short-term financial outflow 
C)  Fall in its interest rate and a short-term financial inflow 
D)  Fall in its interest rate and a short-term financial outflow

Question 4

Keynesian theory asserts that,under a system of fixed exchange rates,the influence of income changes in surplus and deficit countries will automatically promote current-account equilibrium.

Accepted Answer

A) True 
 B)False

Question 5

J.M.Keynes suggested that a trade deficit nation

Accepted Answer

A)  Would experience a fall in income 
B)  Would experience a decline in imports 
C)  Would require active intervention by the government 
D)  Both a and b 
A)  Would experience a fall in income 
B)  Would experience a decline in imports 
C)  Would require active intervention by the government 
D)  Both a and b

Question 6

Table 13.1.Canada's Saving,Investment,Import,and Export Functions (in billions of dollars)Under a System of Fixed Exchange Rates
  
-Referring to Table 13.1,if Canada's income rises by $200 billion,imports would rise by:

Accepted Answer

A)  $50 billion 
B)  $75 billion 
C)  $100 billion 
D)  $125 billion 
A)  $50 billion 
B)  $75 billion 
C)  $100 billion 
D)  $125 billion

Question 7

Figure 13.1.U.S.Capital and Financial Account  
-Refer to Figure 13.1.The U.S.capital and financial account schedule would shift upward from CA0 to CA1 if:

Accepted Answer

A)  U.S.political stability improves relative to foreign political stability 
B)  U.S.interest rates rise relative to foreign interest rates 
C)  Taxes are placed on income earned by U.S.residents from foreign investments 
D)  Restrictions are imposed on international loans granted by foreign banks 
A)  U.S.political stability improves relative to foreign political stability 
B)  U.S.interest rates rise relative to foreign interest rates 
C)  Taxes are placed on income earned by U.S.residents from foreign investments 
D)  Restrictions are imposed on international loans granted by foreign banks

Which approach to balance-of-payments adjustment suggests that balance-of-payments surpluses are the result of excess money demand in the home country?

Table 13.1.Canada's Saving,Investment,Import,and Export Functions (in billions of dollars)Under a System of Fixed Exchange Rates -Referring to Table 13.1,Canada's foreign trade multiplier equals:

Under the gold standard,a deficit nation facing a gold outflow and a decrease in its money supply would also experience a:

Keynesian theory asserts that,under a system of fixed exchange rates,the influence of income changes in surplus and deficit countries will automatically promote current-account equilibrium.

J.M.Keynes suggested that a trade deficit nation

Table 13.1.Canada's Saving,Investment,Import,and Export Functions (in billions of dollars)Under a System of Fixed Exchange Rates -Referring to Table 13.1,if Canada's income rises by $200 billion,imports would rise by:

Figure 13.1.U.S.Capital and Financial Account -Refer to Figure 13.1.The U.S.capital and financial account schedule would shift upward from CA₀ to CA₁ if:

The International Economy and Globalization

Foundations of Modern Trade Theory: Comparative Advantage

Sources of Comparative Advantage

Tariffs

Nontariff Trade Barriers

Trade Regulations and Industrial Policies

Trade Policies for the Developing Nations

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance of Payments

Foreign Exchange

Exchange-Rate Determination

Exchange-Rate Adjustments and the Balance of Payments

Exchange-Rate Systems and Currency Crises

Macroeconomic Policy in an Open Economy

International Banking: Reserves, Debt, and Risk

Filters

Exam 13: Mechanisms of International Adjustment

Which approach to balance-of-payments adjustment suggests that balance-of-payments surpluses are the result of excess money demand in the home country?

Table 13.1.Canada's Saving,Investment,Import,and Export Functions (in billions of dollars)Under a System of Fixed Exchange Rates -Referring to Table 13.1,Canada's foreign trade multiplier equals:

Under the gold standard,a deficit nation facing a gold outflow and a decrease in its money supply would also experience a:

Keynesian theory asserts that,under a system of fixed exchange rates,the influence of income changes in surplus and deficit countries will automatically promote current-account equilibrium.

J.M.Keynes suggested that a trade deficit nation

Table 13.1.Canada's Saving,Investment,Import,and Export Functions (in billions of dollars)Under a System of Fixed Exchange Rates -Referring to Table 13.1,if Canada's income rises by $200 billion,imports would rise by:

Figure 13.1.U.S.Capital and Financial Account -Refer to Figure 13.1.The U.S.capital and financial account schedule would shift upward from CA0 to CA1 if:

The International Economy and Globalization

Foundations of Modern Trade Theory: Comparative Advantage

Sources of Comparative Advantage

Tariffs

Nontariff Trade Barriers

Trade Regulations and Industrial Policies

Trade Policies for the Developing Nations

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance of Payments

Foreign Exchange

Exchange-Rate Determination

Exchange-Rate Adjustments and the Balance of Payments

Exchange-Rate Systems and Currency Crises

Macroeconomic Policy in an Open Economy

International Banking: Reserves, Debt, and Risk

Filters

Figure 13.1.U.S.Capital and Financial Account -Refer to Figure 13.1.The U.S.capital and financial account schedule would shift upward from CA₀ to CA₁ if: