If the United States and Canada trade hydro-powered electricity for Hollywood films, what type of trade does this represent? What will be an ideal response? ANSWER Interindustry
Date: September 10th, 2020
How does the growth in the daily volume of foreign currency transactions compare with the growth rate of the global economy? What will be an ideal response? ANSWER Currency transactions are growing more rapidly.
Date: September 10th, 2020
The action of arbitrage is A) the process of buying a currency cheap and selling it dear. B) the process of buying a currency dear and selling it cheap. C) the process of buying and selling currency at the same price. D) the process of selling currency at different prices in different markets. E) the […]
Date: September 10th, 2020
With fixed exchange rates, central banks must finance trade deficits, allow a devaluation, or else use trade restrictions to restore equilibrium. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Under sticky prices A) a fall in the money supply raises the interest rate to preserve money market equilibrium. B) a fall in the money supply reduces the interest rate to preserve money market equilibrium. C) a fall in the money supply keeps the interest rate intact to preserve money market equilibrium. D) a fall […]
Date: September 10th, 2020
Populist policies are not successful even in the immediate short run at stimulating the economy and creating jobs. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
If countries have similar factor endowments and productivities, what type of trade are they most likely to have? What will be an ideal response? ANSWER Intraindustry
Date: September 10th, 2020
The open-economy multiplier is equal to the reciprocal of the marginal propensity to save. Indicate whether the statement is true or false ANSWER FALSE Explanation: It is equal to the reciprocal of the marginal propensity to save plus the marginal propensity to import.
Date: September 10th, 2020
The United States finances current account deficits largely with dollars and, as a result, faces almost no constraint on its ability to run deficits. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Suppose the United states production possibility frontier was flatter to the widget axis, whereas Germany’s was flatter to the butter axis. We now learn that the German wage doubles, but U.S. wages do not change at all. We now know that A) the United States has no comparative advantage. B) Germany has a comparative advantage […]
Date: September 10th, 2020
