FAC1601 TEST Questions and Answers Verified Solutions Latest Update

FAC1602 Assignment 5 EXAM Questions
and
Answers Verified Solutions Latest
Update


Question:

The graph above depicts supply and demand for U.S. dollars during a trading day,
where the quantity is millions of dollars. In order to support a fixed exchange rate of
0.30 pounds per dollar, the U.S. central bank must.

Answer:
sell 0.8 million dollars per trading day.


Question:

In an open economy, expansionary monetary policy will cause.

Answer:
consumption, investment, and net exports to rise.


Question:

Contractionary monetary policy should increase foreign financial investment in the
United States..

Answer:
False


Question:

Fiscal policy has a greater impact in a closed economy than it does in an open
economy..

Answer:
True

, Question:

Ceteris paribus, an increase in the government budget deficit increases interest rates
in the United States and causes a real appreciation of the dollar..

Answer:
False


Question:

If net exports are equal to net foreign investment,.

Answer:
...


Question:

In an open economy, the current account balance equals ________. (Assume that the
capital account is zero and net transfers are zero.).

Answer:
net foreign investment


Question:

Public saving equals taxes minus government spending minus transfer payments..

Answer:
True


Question:

Refer to Figure 18-1. The appreciation of the dollar is represented as a movement from.

Answer:
D to C.


Question:

Ceteris paribus, a real depreciation of the dollar will decrease net exports in the United
States..

Answer:
False