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Ec 202 Exam 3 Questions With Correct Answers

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EC 202 EXAM 3 QUESTIONS WITH CORRECT ANSWERS

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French and German farmers wanting to buy equipment from an American
manufacturer based in the U.S. will be ________.


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demanding dollars and supplying euros in the foreign exchange market




If currency speculators believe South Korea will have much lower inflation in the
future than the United States, this will most likely cause the South Korean won to
________and the U.S.dollar to ________.


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appreciate; depreciate

, Belize maintains a fixed exchange rate and pegs its currency to the U.S. dollar. A
boom intourism leads to many more Americans traveling to Belize on vacation. Which
of the following represents an activity that the Belize government would likely
undertake to maintain a fixed exchange rate?


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Buy U.S. dollars using Belize currency




Which of the following fiscal policy changes would be the most expansionary?


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a $40 billion increase in government purchases




A bank is in the position to make loans when required reserves


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are less than actual reserves




The real business cycle theory holds that business fluctuations are caused by


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