INTERNATIONAL MACROECONOMICS 11TH
EDITION UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
◉ a) The supply of Badluckville's currency shifts left, causing its
currency to appreciate.
Answer: Suppose that an economic recession in Badluckville causes
a sharp drop in spending on imports and foreign travel. What would
happen in the foreign exchange market?
◉ LEARNING CURVE/////////////////
a summary of the country's transactions with other countries.
Answer: A country's balance of payments accounts is:
◉ foreign exchange
Answer: Currencies are traded in the _____ market.
◉ governmental policy in which the exchange rate is free to
fluctuate.
Answer: A floating exchange rate is a:
,◉ Sweden
Answer: _____ chose not to adopt the euro.
◉ A statistical error has occurred.
Answer: At end of a given year, if a country has a current account
balance of $107 billion and a financial account balance of $100
billion, what is MOST likely to be true?
◉ U.S. dollar depreciated against the euro.
Answer: Suppose that the exchange rate between the U.S. dollar and
the euro is 1 U.S. dollar for 2.5 euros. Now assume that the rate
changes to 1 U.S. dollar for 1.8 euros. Based on this change, the:
◉ fix the exchange rate of its currency.
Answer: A government uses exchange market intervention to:
◉ Great Britain
Answer: _____ chose not to adopt the euro.
◉ country's balance of payments on goods and services plus net
international transfer payments and factor income.
Answer: A country's balance of payments on current account refers
to the:
,◉ people in other countries who want to buy U.S. goods, services,
and assets.
Answer: The primary reason for the demand for U.S. dollars in
foreign exchange markets comes from:
◉ equilibrium exchange rates.
Answer: All of the following are examples of "compromise" exchange
rate regimes EXCEPT:
◉ appreciate.
Answer: If exports from the United States increase, then the U.S.
dollar will:
◉ -1 trillion dollars.
Answer: If the balance on the financial account is $1 trillion, then the
balance on the current account is:
◉ increase; decrease
Answer: When a country's currency undergoes a real depreciation,
this causes exports to _____, and imports to _____.
◉ they can determine the country's nominal exchange rate.
, Answer: Governments have much more power to influence nominal
exchange rates than they have to influence ordinary prices because:
◉ floating
Answer: Monetary policy is more effective with _____ exchange rates.
◉ the value of U.S. assets sold to a foreign country
Answer: Which of the following would NOT be included in the U.S.
balance of payments on current account?
◉ balance of payments on financial account rises.
Answer: If European investors increase their demand for U.S. dollars
because European investors want to increase their investment in
U.S. assets, then:
◉ they can determine the country's nominal exchange rate.
Answer: Governments have much more power to influence nominal
exchange rates than they have to influence ordinary prices because:
◉ increase; decrease
Answer: Rising interest rates _____ the demand for domestic
currency, and _____ the supply of domestic currency in the foreign
exchange market.
EDITION UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
◉ a) The supply of Badluckville's currency shifts left, causing its
currency to appreciate.
Answer: Suppose that an economic recession in Badluckville causes
a sharp drop in spending on imports and foreign travel. What would
happen in the foreign exchange market?
◉ LEARNING CURVE/////////////////
a summary of the country's transactions with other countries.
Answer: A country's balance of payments accounts is:
◉ foreign exchange
Answer: Currencies are traded in the _____ market.
◉ governmental policy in which the exchange rate is free to
fluctuate.
Answer: A floating exchange rate is a:
,◉ Sweden
Answer: _____ chose not to adopt the euro.
◉ A statistical error has occurred.
Answer: At end of a given year, if a country has a current account
balance of $107 billion and a financial account balance of $100
billion, what is MOST likely to be true?
◉ U.S. dollar depreciated against the euro.
Answer: Suppose that the exchange rate between the U.S. dollar and
the euro is 1 U.S. dollar for 2.5 euros. Now assume that the rate
changes to 1 U.S. dollar for 1.8 euros. Based on this change, the:
◉ fix the exchange rate of its currency.
Answer: A government uses exchange market intervention to:
◉ Great Britain
Answer: _____ chose not to adopt the euro.
◉ country's balance of payments on goods and services plus net
international transfer payments and factor income.
Answer: A country's balance of payments on current account refers
to the:
,◉ people in other countries who want to buy U.S. goods, services,
and assets.
Answer: The primary reason for the demand for U.S. dollars in
foreign exchange markets comes from:
◉ equilibrium exchange rates.
Answer: All of the following are examples of "compromise" exchange
rate regimes EXCEPT:
◉ appreciate.
Answer: If exports from the United States increase, then the U.S.
dollar will:
◉ -1 trillion dollars.
Answer: If the balance on the financial account is $1 trillion, then the
balance on the current account is:
◉ increase; decrease
Answer: When a country's currency undergoes a real depreciation,
this causes exports to _____, and imports to _____.
◉ they can determine the country's nominal exchange rate.
, Answer: Governments have much more power to influence nominal
exchange rates than they have to influence ordinary prices because:
◉ floating
Answer: Monetary policy is more effective with _____ exchange rates.
◉ the value of U.S. assets sold to a foreign country
Answer: Which of the following would NOT be included in the U.S.
balance of payments on current account?
◉ balance of payments on financial account rises.
Answer: If European investors increase their demand for U.S. dollars
because European investors want to increase their investment in
U.S. assets, then:
◉ they can determine the country's nominal exchange rate.
Answer: Governments have much more power to influence nominal
exchange rates than they have to influence ordinary prices because:
◉ increase; decrease
Answer: Rising interest rates _____ the demand for domestic
currency, and _____ the supply of domestic currency in the foreign
exchange market.
