With floating exchange rates A) monetary policy is effective. B) fiscal policy is ineffective. C) monetary and fiscal policy are effective. D) fiscal and monetary policy are ineffective. ANSWER A
Date: September 10th, 2020
Security purchases in the United States by foreigners is A) a credit item in the current account. B) a debit item in the capital account. C) a credit item in the capital account. D) a debit item in the current account. ANSWER C
Date: September 10th, 2020
Current account deficits are offset by A) the liquidity balances. B) capital account surpluses. C) the basic balance. D) balance of trade surpluses. ANSWER B
Date: September 10th, 2020
Spencer and Brander’s model highlights the conventional assumption that A) government involvement in business or in the economy tends to fail. B) government subsidies tend to waste taxpayer’s money. C) government subsidies cannot create a successfully competing export. D) government tends to distort when it displaces Adam Smith’s Invisible Hand. E) government subsidies can produce […]
Date: September 10th, 2020
What is the exchange rate between the dollar and the British pound if a pair of American jeans costs 50 dollars in New York and 100 Pounds in London? A) 1.5 dollars per British pound B) 0.5 dollars per British pound C) 2.5 dollars per British pound D) 3.5 dollars per British pound E) 2 […]
Date: September 10th, 2020
Which of the following statements is the MOST accurate? The law of one price states A) in competitive markets free of transportation costs and official barriers to trade, identical goods sold in different countries must sell for the same price when their prices are expressed in terms of the same currency. B) in competitive markets […]
Date: September 10th, 2020
Comparative advantage has mixed results when it comes to predicting a country’s trade patterns. Which of the following is FALSE? A) There are many potential products an economy might export that use the same comparative advantage. B) A large share of international trade is not based on comparative advantage. C) Comparative advantage has proven completely […]
Date: September 10th, 2020
Under Purchasing Power Parity A) E$/E = PUS/PE. B) E$/E = PE/PES. C) E$/E = PUS + PE. D) E$/E = PUS – PE. E) E$/P = PUS/PE. ANSWER A
Date: September 10th, 2020
Wage inequality has been on the rise in virtually all high-income industrial economies since the 1970s. The causes are probably numerous, but the leading explanation for the greatest share of the increase in inequality is A) the growth of trade with developing countries. B) the growth of trade with other high income industrial countries. C) […]
Date: September 10th, 2020
There are debt relief programs currently available for highly indebted poor countries. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
