Q A fixed exchange rate system is alleged to:
A be efficient
Q Which of the following would not be advised for a nation that has experienced difficulty in controlling inflation?
A Contractionary monetary policy.
Q Advocates of fixed exchange rates claim that flexible exchange rates:
A are inflationary
Q The equilibrium level of national income in an open economy is given by:
A I + (X-M) = S
Q What is the correct order of events following an expansionary monetary policy with a flexible exchange rate?
A Interest rate falls, investment and income rise, current account worsens
Q An alleged advantage of flexible over fixed exchange rates is:
A market efficiency
Q When demand is unitary elastic, a change in price will leave expenditures on the commodity___________.
A unchanged
Q To correct a recession and a balance of payments surplus a nation requires:
A expansionary fiscal and monetary policy and either a revaluation or a devaluation
Q Discuss which of the following are international economic problems facing the world today.
A All of the listed choices
Q Under a managed floating exchange rate system, the nation's monetary authorities are entrusted with the responsibility of intervening in foreign exchange markets to smooth out ______ without attempting to affect their ______.
A short run fluctuations in exchange rate, long run trend
Q The equilibrium level of national income in the economy is where _______________.
A leakages = injections
Q A country with budget deficit which is also at full employment can improve its deficit situation by allowing its currency to depreciate, only if,
A the real domestic absorption is reduced
Q To avoid or minimize international financial crises in the future, the IMF is taking which of the following measures?
A Strengthening emerging markets' banking and financial systems
Q If ηM = -0.85 and ηX = -0.62 , then
A Foreign exchange market is stable
Q The system under which the exchange rate is always determined by the forces of demand and supply without any government intervention in foreign exchange markets is a(n):
A freely floating exchange rate system
Q Which of the following is concerned with equilibrating a nation's balance of payments?
A External balance
Q Which of the following is an example of a contractionary monetary policy?
A Decrease in the nation's money supply
Q The system under which exchange rates or par values are periodically changed to correct balance-of-payments disequilibria is known as a(n):
A adjustable peg system
Q To correct a recession and a balance of payments deficit a nation usually requires:
A expansionary fiscal and monetary policies and a devaluation
Q The price elasticity of the ______________ in euros is given by the percentage change in the quantity demanded of US exports by foreigners divided by the percentage change in the price of US exports in euros.
A foreign demand for US exports
RESULTS: 75/100
A be efficient
Q Which of the following would not be advised for a nation that has experienced difficulty in controlling inflation?
A Contractionary monetary policy.
Q Advocates of fixed exchange rates claim that flexible exchange rates:
A are inflationary
Q The equilibrium level of national income in an open economy is given by:
A I + (X-M) = S
Q What is the correct order of events following an expansionary monetary policy with a flexible exchange rate?
A Interest rate falls, investment and income rise, current account worsens
Q An alleged advantage of flexible over fixed exchange rates is:
A market efficiency
Q When demand is unitary elastic, a change in price will leave expenditures on the commodity___________.
A unchanged
Q To correct a recession and a balance of payments surplus a nation requires:
A expansionary fiscal and monetary policy and either a revaluation or a devaluation
Q Discuss which of the following are international economic problems facing the world today.
A All of the listed choices
Q Under a managed floating exchange rate system, the nation's monetary authorities are entrusted with the responsibility of intervening in foreign exchange markets to smooth out ______ without attempting to affect their ______.
A short run fluctuations in exchange rate, long run trend
Q The equilibrium level of national income in the economy is where _______________.
A leakages = injections
Q A country with budget deficit which is also at full employment can improve its deficit situation by allowing its currency to depreciate, only if,
A the real domestic absorption is reduced
Q To avoid or minimize international financial crises in the future, the IMF is taking which of the following measures?
A Strengthening emerging markets' banking and financial systems
Q If ηM = -0.85 and ηX = -0.62 , then
A Foreign exchange market is stable
Q The system under which the exchange rate is always determined by the forces of demand and supply without any government intervention in foreign exchange markets is a(n):
A freely floating exchange rate system
Q Which of the following is concerned with equilibrating a nation's balance of payments?
A External balance
Q Which of the following is an example of a contractionary monetary policy?
A Decrease in the nation's money supply
Q The system under which exchange rates or par values are periodically changed to correct balance-of-payments disequilibria is known as a(n):
A adjustable peg system
Q To correct a recession and a balance of payments deficit a nation usually requires:
A expansionary fiscal and monetary policies and a devaluation
Q The price elasticity of the ______________ in euros is given by the percentage change in the quantity demanded of US exports by foreigners divided by the percentage change in the price of US exports in euros.
A foreign demand for US exports
RESULTS: 75/100
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