Homework Answers
(26) (D)
Currency = Coins and notes in circulation
(27) (C)
Higher domestic interest rate will incraese capital inflow, which will increase total saving in the country, shifting saving curve rightward and decreasing interest rate until it falls to initial level.
(28) (A)
Since value of goods in inventory was already included in GDP of the year in which it was produced, sale out of inventory is excluded from GDP.
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26. Currency equals:- A). the sum of funds in chequing accounts. B. the sum of chequing...
1.)The ____________ is the sum of currency and reserve deposits, the monetary _________ of the central...
1.)The ____________ is the sum of currency and reserve deposits, the monetary _________ of the central bank A.)money stock; assets B.)money stock; liabilities C.)monetary base; liabilities D.)monetary base; assets 2.)Time deposits are ______ liquid than savings deposits and typically earn a _________ interest rate than savings deposits. A.)less; higher B.)more; higher C.)more; lower D.)less; lower 3.)If banks must hold $2 in reserves for each $10 in deposits, and the public decides to hold $3 in currency for each $10 in...
using the market for loanable Funds and the market for Foreign Currency exchange, How does an...
using the market for loanable Funds and the market for Foreign Currency exchange, How does an investment tax credit affect national saving, domestic investment, net capital outflow, the interest rate, the exchange rat, and balance? the trade
2. An appreciation of a nation's currency can be the result of which of the folowing?...
2. An appreciation of a nation's currency can be the result of which of the folowing? a. an increase in net exports b. a decrease in net exports c. a fal in national saving d. a decrease in domestic demand for investment 3. The government n an open economy increases spending. As a resut, the supply of loanable funds from national saving_ leading to an). . net capital outflow and a real exchange rate / a. fals, reduced, appreciation b....
The sum of currency and bank deposits at the central bank is called: a. the money...
The sum of currency and bank deposits at the central bank is called: a. the money supply. b. domestic assets. c. the monetary base. d. fractional reserves. Official intervention in the foreign exchange market to defend a fixed exchange rate when the value of the country's currency is under downward pressure causes a. international reserve holdings to rise. b. a downward pressure on the country's interest rates. c.an increase in the liabilities of the central bank. d. the domestic money...
QUICK CHECK multiple choice 1. Holding other things constant, an increase in the world interest rate...
QUICK CHECK multiple choice 1. Holding other things constant, an increase in the world interest rate increases which of the following? a. national saving and domestic investment b. national saving and the net capital outflow c. domestic investment and the net capital outflow d. national saving only 2. An appreciation of a nation's currency can be the result of which of the following? a. an increase in net exports b. a decrease in net exports c. a fall in national...
Suppose that there is perfect capital mobility and fixed exchange rates. If there is an exogenous...
Suppose that there is perfect capital mobility and fixed exchange rates. If there is an exogenous increase in demand for home country's exports this will in the short run wered of 5.00 estion Select one: a. Decreases the domestic income and does not change the interest rates o b. Does not change the domestic income and interest rates c. Increases the domestic income and does not change the interest rates d. Increases the domestic income and interest rates e. Decreases...
19. In the real business cycle model, output and employment are O A. determined by real...
19. In the real business cycle model, output and employment are O A. determined by real supply-side variables. O B. determined by supply and demand factors. O C. entirely demand determined. O D. affected by supply-side variables and unanticipated changes in demand. 20. Which of the following models depicts the role of money as affecting only the price level? O A. The new classical model O B. The Keynesian model O C. The real business cycle model O D. The...
The government in an open economy increases spending. As a result, the supply of loanable funds...
The government in an open economy increases spending. As a result, the supply of loanable funds from national saving —, leading to a(n) — net capital outflow __ and a real exchange rate ___, a. falls, reduced, appreciation b. falls, increased, depreciation C increases, increased, appreciation d. increases, decreases, depreciation
1) The price of one currency in terms of another is called A)...
1) The price of one currency in terms of another is called A) the exchange rate. B) purchasing power parity. C) the terms of trade. D) a currency band. 2) The three policies which cannot be maintained simultaneously by a nation (sometimes referred to as the "trilemma") do NOT include A) independent control of the money supply. B) independent control of fiscal policy. C) free flow of capital. D) fixed exchange rates 3) The foreign exchange rate refers to A) the rate of change in...
8. In a small open economy, if the world real interest rate is above the rate...
8. In a small open economy, if the world real interest rate is above the rate at which national saving exceeds domestic investment, then there will be a trade _and net capital outflow. A) surplus; negative B) deficit; positive C) surplus, positive D) deficit; negative
using the market for loanable Funds and the market for Foreign Currency exchange, How does an investment tax credit affect national saving, domestic investment, net capital outflow, the interest rate, the exchange rat, and balance? the trade
2. An appreciation of a nation's currency can be the result of which of the folowing? a. an increase in net exports b. a decrease in net exports c. a fal in national saving d. a decrease in domestic demand for investment 3. The government n an open economy increases spending. As a resut, the supply of loanable funds from national saving_ leading to an). . net capital outflow and a real exchange rate / a. fals, reduced, appreciation b....
The sum of currency and bank deposits at the central bank is called: a. the money supply. b. domestic assets. c. the monetary base. d. fractional reserves. Official intervention in the foreign exchange market to defend a fixed exchange rate when the value of the country's currency is under downward pressure causes a. international reserve holdings to rise. b. a downward pressure on the country's interest rates. c.an increase in the liabilities of the central bank. d. the domestic money...
QUICK CHECK multiple choice 1. Holding other things constant, an increase in the world interest rate increases which of the following? a. national saving and domestic investment b. national saving and the net capital outflow c. domestic investment and the net capital outflow d. national saving only 2. An appreciation of a nation's currency can be the result of which of the following? a. an increase in net exports b. a decrease in net exports c. a fall in national...
Suppose that there is perfect capital mobility and fixed exchange rates. If there is an exogenous increase in demand for home country's exports this will in the short run wered of 5.00 estion Select one: a. Decreases the domestic income and does not change the interest rates o b. Does not change the domestic income and interest rates c. Increases the domestic income and does not change the interest rates d. Increases the domestic income and interest rates e. Decreases...
19. In the real business cycle model, output and employment are O A. determined by real supply-side variables. O B. determined by supply and demand factors. O C. entirely demand determined. O D. affected by supply-side variables and unanticipated changes in demand. 20. Which of the following models depicts the role of money as affecting only the price level? O A. The new classical model O B. The Keynesian model O C. The real business cycle model O D. The...
The government in an open economy increases spending. As a result, the supply of loanable funds from national saving —, leading to a(n) — net capital outflow __ and a real exchange rate ___, a. falls, reduced, appreciation b. falls, increased, depreciation C increases, increased, appreciation d. increases, decreases, depreciation
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