Download If purchasing-power parity holds, a dollar will buy more

If purchasing-power parity holds, a dollar will buy
more goods in foreign countries than in the United States.
as many goods in foreign countries as it does in the United States.
fewer goods in foreign countries than it does in the United States.
None of the above is implied by purchasing-power parity.
Question 2
0.5 points Save
An open economy's GDP is given by
Y = C + I + G.
Y = C + I + G + T.
Y = C + I + G + S.
Y = C + I + G + NX.
Question 3
0.5 points Save
Suppose that the exchange rate is 50 Bangladesh taka per dollar,
that a bushel of rice costs 200 taka in Bangladesh and $3 in the
United States. Then the real exchange rate is
greater than one and arbitrageurs could profit by buying
rice in the United States and selling it in Bangladesh.
greater than one and arbitrageurs could profit by buying
rice in Bangladesh and selling it in the United States.
less than one and arbitrageurs could profit by buying rice
in the United States and selling it in Bangladesh.
less than one and arbitrageurs could profit by buying rice
in Bangladesh and selling it in the United States.
Question 4
0.5 points Save
Use the (hypothetical) information in the following table to answer
the following questions.
Table 18-1
Currency per
Country Currency U.S.
Dollar
  4.00
Brazil
Real
Japan
Mexico
Sweden
Thailand
Yen
Peso
Krona
Baht
125.00
10.00
  9.00
45.00
U.S. Price Country
Index
Price
Index
200
200
200
200
200
  
800
50,000
2,000
2,000
8,000
Refer to Table 18-1. Which currency(ies) is(are) less valuable than
predicted by the doctrine of purchasing-power parity?
real and peso
yen, krona and baht
yen and krona
baht
Question 5
0.5 points Save
According to the classical dichotomy, which of the following
increases when the money supply increases?
the real interest rate
real GDP
the real wage
None of the above increases.
Question 6
0.5 points Save
Inflation can be measured by the
change in the consumer price index.
percentage change in the consumer price index.
percentage change in the price of a specific commodity.
change in the price of a specific commodity.
Question 7
0.5 points Save
Consider the exhibit below for the following questions.
Figure 20-1
Refer to Figure 20-1. If the economy starts at A and moves to D,
the economy moves
to A in the long run.
to B in the long run.
to C in the long run.
back to D in the long run.
Question 8
0.5 points Save
When the money market is drawn with the value of money on the
vertical axis, an increase in the money supply causes the
equilibrium value of money
and equilibrium quantity of money to increase.
and equilibrium quantity of money to decrease.
to increase, while the equilibrium quantity of money
decreases.
to decrease, while the equilibrium quantity of money
increases.
Question
9
0.5 points
Bob, a Greek citizen, opens a restaurant in Chicago, USA. His
expenditures
increase U.S. net capital outflow and have no affect on
Greek net capital outflow.
increase U.S. net capital outflow and increase Greek net
capital outflow.
Save
increase U.S. net capital outflow, but decrease Greek net
capital outflow.
decrease U.S. net capital outflow, but increase Greek net
capital outflow.
Question 10
0.5 points Save
According to purchasing-power parity, if prices in the United
States increase by a larger percentage than prices in Algeria, then
the real exchange defined as Algerian goods per unit of
U.S. goods rises.
the real exchange defined as Algerian goods per unit of
U.S. goods falls.
the nominal exchange rate defined as Algerian currency
per dollar rises.
the nominal exchange rate defined as Algerian currency
per dollar falls.
Question 11
0.5 points Save
Consider the exhibit below for the following questions.
Figure 20-1
Refer to Figure 20-1. If the economy starts at A and there is a fall
in aggregate demand, the economy moves
back to A in the long run.
to B in the long run.
to C in the long run.
to D in the long run.
Question 12
0.5 points Save
During a recession the economy experiences
rising employment and income.
rising employment and falling income.
rising income and falling employment.
falling employment and income.
Question 13
0.5 points Save
Most economists believe that classical economic theory is a good
description of the world
in neither the short nor long run.
in the short run and in the long run.
in the short run, but not in the long run.
in the long run, but not in the short run.
Question 14
0.5 points Save
The exchange rate is about 153 Kazakhstan tenge per dollar.
According to purchasing-power parity, this exchange rate would
rise if
the price level in either the United States or Kazakhstan
rose.
the price level in either the United States or Kazakhstan
fell.
the price level in the United States rose or the price
level in Kasakhstan fell.
the price level in the United States fell or the price level
in Kasakhstan rose.
Question 15
0.5 points Save
Which of the following does not determine the long-run level of
real GDP?
the price level
the supply of labor
available natural resources
available technology
Question 16
0.5 points Save
If the economy is initially in long-run equilibrium, then shifts in
aggregate demand affect prices
and output in both the short and long run.
and output only in the short run.
in the long and short run, but affect output only in the
short run.
in the long and short run, but affect output only in the
long run.
Question 17
0.5 points Save
In order to maintain stable prices, the central bank must
maintain low interest rates.
keep unemployment low.
tightly control the money supply.
sell indexed bonds.
Question 18
0.5 points Save
For a given real interest rate, an increase in inflation makes the
after-tax real interest rate
decrease, which encourages savings.
decrease, which discourages savings.
increase, which encourages savings.
increase, which discourages savings.
Question 19
0.5 points Save
A depreciation of the UAE real exchange rate induces UAE
consumers to buy
fewer domestic goods and fewer foreign goods.
more domestic goods and fewer foreign goods.
fewer domestic goods and more foreign goods.
more domestic goods and more foreign goods.
Question 20
0.5 points Save
Use the figure below for the following questions.
Figure 17-1
Refer to Figure 17-1. If the current money supply is located at
MS1,
there is no excess supply or excess demand if the value
of money is 2.
the equilibrium is at point C.
there is an excess supply of money if the value of
money is 1.
All of the above are correct.