1. If the demand for loanable funds shifts left, then (Points : 1)
the real interest rate and the equilibrium quantity of loanable funds both fall.
the real interest rate falls and the equilibrium quantity of loanable funds rises.
the real interest rate and the equilibrium
quantity of loanable funds both rise.
the real interest rate rises and the equilibrium
quantity of loanable funds falls.
2. The theory of liquidity preference is most helpful in understanding (Points
: 1)
the wealth effect.
the exchange-rate effect.
the interest-rate effect.
misperceptions
theory.
3. If a country experiences capital flight, which of the following curves shift
right? (Points : 1)
only the demand for loanable funds.
only the supply of dollars in the market for foreign-currency exchange.
only the net capital outflow curve and the supply of dollars in the market for foreign currency exchange.
the demand for loanable funds, the net capital outflow curve, and the supply of dollars in the market for foreign currency
exchange.
4. If the U.S. imposed an import quota on apples, then which of the following would
rise? (Points : 1)
the U.S. real exchange rate and U.S. net
exports
the U.S. real exchange rate but not U.S. net
exports
U.S. net exports but not the U.S. real exchange
rate
neither the U.S. real exchange rate nor U.S. net
exports
5.
Figure 32-1
View Full Image
Refer to Figure 32-1. The loanable funds market is in equilibrium at
(Points : 1)
2 percent, $20 billion.
4 percent, $40 billion.
6 percent, $60 billion.
None of the above is
correct.
6. From
2001 to 2004, the U.S. government went from a budget surplus to a budget
deficit. According to the open-economy macroeconomic model, this should have
decreased (Points : 1)
both the supply of loanable funds and the supply
of dollars in the market for foreign-currency exchange.
neither the supply of loanable funds nor the
supply of dollars in the market for foreign-currency
exchange.
the supply of loanable funds but not the supply
of dollars in the market for foreign-currency exchange.
the supply of dollars in the market for
foreign-currency exchange, but not the supply of loanable
funds.
7. The
sticky-wage theory of the short-run aggregate supply curve says that when the
price level rises more than expected, (Points : 1)
production is more profitable and employment
rises.
production is more profitable and employment
falls.
production is less profitable and employment
rises.
production is less profitable and employment
falls.
8. Which of the following is a consistent response to an increase in the U.S. real
interest rate? (Points : 1)
a London bank purchases a U.S. bond instead of a Japanese bond it had considered purchasing.
U.S. firms decide to buy more capital goods
a U.S. citizen decides to put less money in his savings account than he had planned.
All of the above are consistent.
9.
According to liquidity preference theory, equilibrium in the money
market is achieved by adjustments in (Points : 1)
the price level.
the interest rate.
the exchange rate.
real
wealth.
10. If
there is capital flight from the United States, then the demand for loanable
funds (Points : 1)
and the supply of dollars in the
foreign-exchange market shift right.
and the supply of dollars in the
foreign-exchange market shift left.
shifts left while the supply of dollars in the
foreign-exchange market shifts right.
shifts right while the supply of dollars in the
foreign-exchange market shifts left.
11. If
at a given real interest rate desired national saving would be $50 billion,
domestic investment would be $40 billion, and net capital outflow would be $20
billion, then at that real interest rate in the loanable funds market there
would be a (Points : 1)
surplus. The real interest rate would
rise.
surplus. The real interest rate would
fall.
shortage. The real interest rate would
rise.
shortage. The interest rate would
fall.
12. In
recent years, the Federal Reserve has conducted policy by setting a target for
the (Points : 1)
size of the money
supply.
growth rate of the money
supply.
federal funds rate.
discount
rate.
13. If
the supply of loanable funds shifts right, then (Points : 1)
the real interest rate and the equilibrium
quantity of loanable funds both fall.
the real interest rate falls and the equilibrium
quantity of loanable funds rises.
the real interest rate and the equilibrium
quantity of loanable funds both rise.
the real interest rate rises and the equilibrium
quantity of loanable funds falls.
14.
Which of the following is included in the supply of U.S. dollars in the
market for foreign-currency exchange in the open-economy macroeconomic
model? (Points : 1)
A retail outlet in Canada wants to buy handbags
from a U.S. manufacturer.
A U.S. bank loans dollars to Karen, a U.S.
resident, who wants to purchase a car in the U.S.
A U.S. based law firm wants to build a new
office in Japan.
All of the above are
correct.
15. In the open-economy macroeconomic model, if there is a surplus in the market for
foreign-currency exchange, which of the following will move the market to
equilibrium? (Points : 1)
the real exchange rate depreciates and net exports fall.
the real exchange rate depreciates and net exports rise.
the real exchange rate appreciates and net
exports fall.
the real exchange rate appreciates and net
exports rise.
16.
Which of the following is included in the demand for dollars in the market for foreign-currency exchange in the open-economy macroeconomic
model? (Points : 1)
A firm in Mexico wants to buy corn from a U.S. firm.
A Japanese bank desires to purchase U.S. Treasury securities.
An U.S. citizen wants to buy a bond issued by a Mexican corporation.
All of the above are
correct.
17. If
a government increases its budget deficit, then domestic interest rates
(Points : 1)
and net exports rise.
rise and net exports
fall.
fall and net exports
rise.
and net exports
fall.
18.
Suppose that the United States imposes an import quota on televisions.
In the open-economy macroeconomic model this quota shifts the (Points :
1)
U.S. supply of loanable funds
left.
U.S. demand for loanable funds
left.
demand for U.S. dollars in the market for
foreign-currency exchange right.
supply of U.S. dollars in the market for
foreign-currency exchange left.
19. In the open-economy macroeconomic model, if a country’s interest rate rises, then
its (Points : 1)
net capital outflow and net exports rise.
net capital outflow rises and its net exports fall.
net capital outflow falls and its net exports rise.
net capital outflow and net exports fall.
20.
Which of the following contains a list only of things that decrease when the budget deficit of the U.S. increases? (Points : 1)
U.S. net exports, U.S. domestic investment, U.S. net capital outflow
U.S. supply of loanable funds, U.S. interest
rates, U.S. domestic investment
U.S. imports, U.S. interest rates, the real
exchange rate of the dollar
None of the above is correct.
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