INTERNATIONAL ECONOMICS THEORY AND
POLICY ACTUAL TEST PAPER QUESTIONS AND
SOLUTIONS GRADED A+
◉ Expansionary Fiscal Policy.
Answer: Boost domestic demand (raise economic output).
◉ Restrictive Fiscal Policy.
Answer: Reduce domestic demand (lower economic output).
◉ Monetary policy.
Answer: Adjusting the supply of money in an economy to achieve
some combination of inflation and output stabilization.
◉ Central Bank.
Answer: An institution that manages a country's currency, money
supply, and interest rates.
◉ Central bank independence.
Answer: Degree to which a country's central bank can set monetary
policy free from interference by the government.
,◉ Open market operations.
Answer: These deal with the interest rates in the economy.
◉ Discount rate.
Answer: The interest rate charged to commercial banks for loans
received from the central bank.
◉ Balance of payments.
Answer: Accounting technique that records the movements of goods,
services, and money across national borders; sum of credits and
debits.
◉ Current account.
Answer: Records all payments between a country and the rest of the
world in connection with goods, services, and income earned on
foreign investments.
◉ John Maynard Keynes.
Answer: Economist whose ideas influenced monetary and fiscal
policy solutions for the Bretton Woods systems.
◉ Smoot-Hawley tariff.
Answer: The highest tariff ever in peacetime, reflecting the
Depression and Congressional 'logrolling.'
, ◉ Protectionist.
Answer: Policies that protect domestic industries from foreign
competition.
◉ Financial crisis.
Answer: A situation where there is a deficit or surplus in the balance
of payments, indicating economic health.
◉ Charles P. Kindleberger.
Answer: Developed the theory that the international economic
system was unstable due to the British inability and US
unwillingness to stabilize financial crises.
◉ Lender of last resort.
Answer: Responsibility a 'creditor' must assume by providing
liquidity in financial crises.
◉ Countercyclical.
Answer: Providing stable long-term lending that counteracts
economic cycles.
◉ Mercantilism.
POLICY ACTUAL TEST PAPER QUESTIONS AND
SOLUTIONS GRADED A+
◉ Expansionary Fiscal Policy.
Answer: Boost domestic demand (raise economic output).
◉ Restrictive Fiscal Policy.
Answer: Reduce domestic demand (lower economic output).
◉ Monetary policy.
Answer: Adjusting the supply of money in an economy to achieve
some combination of inflation and output stabilization.
◉ Central Bank.
Answer: An institution that manages a country's currency, money
supply, and interest rates.
◉ Central bank independence.
Answer: Degree to which a country's central bank can set monetary
policy free from interference by the government.
,◉ Open market operations.
Answer: These deal with the interest rates in the economy.
◉ Discount rate.
Answer: The interest rate charged to commercial banks for loans
received from the central bank.
◉ Balance of payments.
Answer: Accounting technique that records the movements of goods,
services, and money across national borders; sum of credits and
debits.
◉ Current account.
Answer: Records all payments between a country and the rest of the
world in connection with goods, services, and income earned on
foreign investments.
◉ John Maynard Keynes.
Answer: Economist whose ideas influenced monetary and fiscal
policy solutions for the Bretton Woods systems.
◉ Smoot-Hawley tariff.
Answer: The highest tariff ever in peacetime, reflecting the
Depression and Congressional 'logrolling.'
, ◉ Protectionist.
Answer: Policies that protect domestic industries from foreign
competition.
◉ Financial crisis.
Answer: A situation where there is a deficit or surplus in the balance
of payments, indicating economic health.
◉ Charles P. Kindleberger.
Answer: Developed the theory that the international economic
system was unstable due to the British inability and US
unwillingness to stabilize financial crises.
◉ Lender of last resort.
Answer: Responsibility a 'creditor' must assume by providing
liquidity in financial crises.
◉ Countercyclical.
Answer: Providing stable long-term lending that counteracts
economic cycles.
◉ Mercantilism.
