INTERNATIONAL MACROECONOMICS 11TH
EDITION FINAL PAPER SOLVED QUESTIONS
WITH COMPLETE ANSWERS
◉ Deregulation.
Answer: Reducing government rules on industries, such as
banking/finance.
◉ Exchange Rate.
Answer: The price of one currency in terms of another currency.
◉ Unemployment.
Answer: People in the labor force who do not have a job but are
actively looking for work.
◉ Classical Economics.
Answer: A theory that markets tend to self-correct and government
should usually stay limited.
◉ Keynesianism.
,Answer: A theory that private demand can be unstable and
government may need to use fiscal/monetary policy to stabilize the
economy.
◉ Consumer Price Index.
Answer: CPI measures the average price of a basket of goods and
services bought by consumers.
◉ Government Expenditures.
Answer: Government purchases of goods/services, like
infrastructure, education, defense, and public services.
◉ Aggregate Expenditures.
Answer: Total planned spending in the economy: AE = C + I + G + (X -
M).
◉ Real vs. Nominal values.
Answer: Nominal values are measured in current dollars. Real values
adjust for inflation.
◉ Federal Reserve Bank.
Answer: The U.S. central bank. It controls monetary policy,
supervises banks, and helps stabilize the financial system.
, ◉ Balance of Trade.
Answer: Exports minus imports. Surplus if positive, deficit if
negative.
◉ Non-tariff barriers.
Answer: Trade limits other than tariffs, such as quotas, regulations,
licensing rules, or safety standards that restrict imports.
◉ Supply of Dollars.
Answer: Dollars offered in foreign exchange markets, often when
Americans buy foreign goods/assets or travel abroad.
◉ Demand for Dollars.
Answer: Demand from foreigners who want dollars to buy U.S.
goods, services, or financial assets.
◉ Sub-prime mortgage.
Answer: A mortgage made to a higher-risk borrower, often with
weaker credit.
◉ Credit-Default Swap.
Answer: A financial contract similar to insurance against default on a
debt/security.
EDITION FINAL PAPER SOLVED QUESTIONS
WITH COMPLETE ANSWERS
◉ Deregulation.
Answer: Reducing government rules on industries, such as
banking/finance.
◉ Exchange Rate.
Answer: The price of one currency in terms of another currency.
◉ Unemployment.
Answer: People in the labor force who do not have a job but are
actively looking for work.
◉ Classical Economics.
Answer: A theory that markets tend to self-correct and government
should usually stay limited.
◉ Keynesianism.
,Answer: A theory that private demand can be unstable and
government may need to use fiscal/monetary policy to stabilize the
economy.
◉ Consumer Price Index.
Answer: CPI measures the average price of a basket of goods and
services bought by consumers.
◉ Government Expenditures.
Answer: Government purchases of goods/services, like
infrastructure, education, defense, and public services.
◉ Aggregate Expenditures.
Answer: Total planned spending in the economy: AE = C + I + G + (X -
M).
◉ Real vs. Nominal values.
Answer: Nominal values are measured in current dollars. Real values
adjust for inflation.
◉ Federal Reserve Bank.
Answer: The U.S. central bank. It controls monetary policy,
supervises banks, and helps stabilize the financial system.
, ◉ Balance of Trade.
Answer: Exports minus imports. Surplus if positive, deficit if
negative.
◉ Non-tariff barriers.
Answer: Trade limits other than tariffs, such as quotas, regulations,
licensing rules, or safety standards that restrict imports.
◉ Supply of Dollars.
Answer: Dollars offered in foreign exchange markets, often when
Americans buy foreign goods/assets or travel abroad.
◉ Demand for Dollars.
Answer: Demand from foreigners who want dollars to buy U.S.
goods, services, or financial assets.
◉ Sub-prime mortgage.
Answer: A mortgage made to a higher-risk borrower, often with
weaker credit.
◉ Credit-Default Swap.
Answer: A financial contract similar to insurance against default on a
debt/security.
