In 2010, about A) 20 percent of foreign exchange transactions involved exchanges of foreign currencies for U.S. dollars. B) 10 percent of foreign exchange transactions involved exchanges of foreign currencies for U.S. dollars. C) 30 percent of foreign exchange transactions involved exchanges of foreign currencies for U.S. dollars. D) 40 percent of foreign exchange transactions […]
Which of the following is an example of intraindustry trade? A) Trading peanut oil for tractors B) Trading crude oil for automobiles C) Trading Nokia smartphone for Apple iPhones D) Trading jeans for cotton ANSWER C
Covered interest arbitrage involves both A) the purchase of a foreign asset and a forward contract in the market for foreign exchange. B) the purchase of a domestic asset and a spot contract in the market for foreign exchange. C) the sale of a foreign asset and the purchase of a forward contract in the […]
In basic terms, the current account is equal to A) imports plus exports. B) savings minus consumption. C) exports minus imports. D) savings plus exports. ANSWER C
Indirectly, overvalued exchange rates in Latin America caused A) a capital shortage in agriculture. B) a capital shortage in industry. C) a capital abundance in agriculture. D) a growth in incomes in rural areas. E) an increase in competitive pressures faced by industry. ANSWER A
Leontief found that A) U.S. exports are capital intensive relative to U.S. imports. B) U.S. imports are labor intensive relative to U.S. exports. C) U.S. exports are neither labor nor capital intensive. D) None of the above. ANSWER B
Internal balance can be graphically represented as the intersection of the IS curve with the LM curve. Indicate whether the statement is true or false ANSWER TRUE
Which of the following statements is the MOST accurate? In general A) the monetary approach to the exchange rate is a long run theory. B) the monetary approach to the exchange rate is a short run theory. C) the monetary approach to the exchange rate is both a short and long run theory. D) the […]
Given the information in the table above. If these two countries trade these two goods in the context of the Ricardian model of comparative advantage, then what is the lower limit of the world equilibrium price of widgets? What will be an ideal response? ANSWER 1/2 Cloths.
Which one of the following statements is most correct? A) Any central bank purchase of assets automatically results in an increase in the domestic money supply, while any central bank sale of assets automatically causes the money supply to decline. B) Any central bank purchase of assets results in an increase in the domestic money […]
