Test Bank for International Macroeconomics, 5e
Robert Feenstra, Alan Taylor (All Chapters
download link is at the end of this file)
Chapter 12
1. International macroeconomics studies:
a. decisions of individual households in other countries.
b. decisions by governments in other countries.
c. the interrelationship of large-scale economic issues across countries.
d. the interrelationship of politics and economics within a country.
ANSWER: c
2. International macroeconomics focuses on:
a. isolated nations.
b. economy -wide variables such as interest rates, income, prices, and wealth.
c. city-level economic problems.
d. market -specific variables such as the price of orange juice.
ANSWER: b
3. Key elements of the international macroeconomy are:
a. political alliances, capital accumulation, and monopoly power.
b. many currencies, financial integration, and economic policy choices made in context.
c. competition, efficiency, and openness.
d. waste and overuse of natural resources, disregard for the environment, and unfair competition.
ANSWER: b
4. It is _________ to assume that all goods are priced in a common currency in international markets. a.
correct in every case
b. dangerous
c. incorrect in every case
, d. unrealistic
ANSWER: d
5. Understanding how a nation's economy works requires a complete understanding of the: a. political
system.
b. level of imports and exports.
c. exchange rate with other currencies.
d. tax system.
ANSWER: c
6. What is an exchange rate?
a. It is the percentage rate of interest charged by international banks to exchange currency.
b. It is the fees banks charge their best customers to exchange currency.
c. It is the price of one nation's currency measured in units of another nation's currency.
d. It is the lending rate for international credit.
ANSWER: c
7. Which of the following would be an exchange rate?
a. One car trades for 1,000 books.
b. One dollar trades for two candy bars.
c. One dollar trades for four quarters.
d. One dollar trades for three pesos. ANSWER: d
8. Suppose one dollar can purchase eight pesos. This is an example of:
a. an international price.
b. the price of a dollar in terms of pesos.
c. the price of a peso in terms of dollars.
d. the price of goods denominated in dollars. ANSWER: c
9. Exchange rate behavior is:
, a. unimportant in determining income, prices, and flows of goods and services.
b. very important in determining income, prices, and flows of goods and services.
c. very predictable, steady, and not of interest to policymakers.
d. not subject to market forces, but is determined by international agreements.
ANSWER: b
10. Changes in a nation's exchange rates have an impact on:
a. prices of equities but not domestic bonds.
b. relative prices of home and foreign goods.
c. prices of nontradable services.
d. prices of international bonds but not equities.
ANSWER: b
11. Compared with 100 years ago, the number of currencies exchanged today is:
a. dozens fewer.
b. insignificant.
c. many times more.
d. the same.
ANSWER: c
12. Exchange rates exhibit:
a. steady behavior across the board.
b. erratic behavior across the board.
c. very different behavior, depending on whether the rates are fixed or floating.
d. variable behavior (sometimes steady and other times erratic), depending on the business cycle.
ANSWER: c
13. A floating exchange rate regime can often lead to:
a. higher domestic investment.
b. faster economic growth.
Robert Feenstra, Alan Taylor (All Chapters
download link is at the end of this file)
Chapter 12
1. International macroeconomics studies:
a. decisions of individual households in other countries.
b. decisions by governments in other countries.
c. the interrelationship of large-scale economic issues across countries.
d. the interrelationship of politics and economics within a country.
ANSWER: c
2. International macroeconomics focuses on:
a. isolated nations.
b. economy -wide variables such as interest rates, income, prices, and wealth.
c. city-level economic problems.
d. market -specific variables such as the price of orange juice.
ANSWER: b
3. Key elements of the international macroeconomy are:
a. political alliances, capital accumulation, and monopoly power.
b. many currencies, financial integration, and economic policy choices made in context.
c. competition, efficiency, and openness.
d. waste and overuse of natural resources, disregard for the environment, and unfair competition.
ANSWER: b
4. It is _________ to assume that all goods are priced in a common currency in international markets. a.
correct in every case
b. dangerous
c. incorrect in every case
, d. unrealistic
ANSWER: d
5. Understanding how a nation's economy works requires a complete understanding of the: a. political
system.
b. level of imports and exports.
c. exchange rate with other currencies.
d. tax system.
ANSWER: c
6. What is an exchange rate?
a. It is the percentage rate of interest charged by international banks to exchange currency.
b. It is the fees banks charge their best customers to exchange currency.
c. It is the price of one nation's currency measured in units of another nation's currency.
d. It is the lending rate for international credit.
ANSWER: c
7. Which of the following would be an exchange rate?
a. One car trades for 1,000 books.
b. One dollar trades for two candy bars.
c. One dollar trades for four quarters.
d. One dollar trades for three pesos. ANSWER: d
8. Suppose one dollar can purchase eight pesos. This is an example of:
a. an international price.
b. the price of a dollar in terms of pesos.
c. the price of a peso in terms of dollars.
d. the price of goods denominated in dollars. ANSWER: c
9. Exchange rate behavior is:
, a. unimportant in determining income, prices, and flows of goods and services.
b. very important in determining income, prices, and flows of goods and services.
c. very predictable, steady, and not of interest to policymakers.
d. not subject to market forces, but is determined by international agreements.
ANSWER: b
10. Changes in a nation's exchange rates have an impact on:
a. prices of equities but not domestic bonds.
b. relative prices of home and foreign goods.
c. prices of nontradable services.
d. prices of international bonds but not equities.
ANSWER: b
11. Compared with 100 years ago, the number of currencies exchanged today is:
a. dozens fewer.
b. insignificant.
c. many times more.
d. the same.
ANSWER: c
12. Exchange rates exhibit:
a. steady behavior across the board.
b. erratic behavior across the board.
c. very different behavior, depending on whether the rates are fixed or floating.
d. variable behavior (sometimes steady and other times erratic), depending on the business cycle.
ANSWER: c
13. A floating exchange rate regime can often lead to:
a. higher domestic investment.
b. faster economic growth.
