TEST BANK
** All Chapters included
,Table of Contents are given below
1.Economics: Foundations and Models
2.Trade-offs, Comparative Advantage, and the Market System
3.Where Prices Come From The Interaction of Supply and Demand
4.GDP Measuring Total Production and Income
5.Unemployment and Inflation
6.Economic Growth, the Financial System, and Business Cycles
7.Long-Run Economic Growth Sources and Policies
8.Aggregate Expenditure and Output in the Short Run
9.Aggregate Demand and Aggregate Supply Analysis
10.Money, Banks, and the Bank of Canada
11.Monetary Policy
12.Fiscal Policy
13.Inflation, Unemployment, and Bank of Canada Policy
14.Macroeconomics in an Open Economy
,The test bank is organized in reverse order, with the last chapter displayed first, to ensure
that all chapters are included in this document. (Complete Chapters included Ch14-1)
Macroeconomics, 5Ce (Hubbard)
Chapter 14 Macroeconomics in an Open Economy
14.1 Explain how the balance of payments is calculated
1) An economy that has interactions in trade or finance with other economies is referred to as
A) an open economy.
B) a closed economy.
C) a trade-balanced economy.
D) a net foreign investment economy.
E) a market economy.
Answer: A
Diff: 1 Type: MC
Topic: Closed vs. Open Economies
Learning Outcome: 14.1 Explain how the balance of payments is calculated
AACSB: Reflective Thinking
2) In 2020, global profit for Amazon was $820 million higher when measured in dollars than when
measured in local currencies. The reason for this discrepancy is that value of the
A) euro decreased relative to the British pound.
B) British pound increased relative to the U.S. dollar.
C) U.S. dollar increased relative to most other currencies.
D) U.S. dollar decreased relative to the Japanese yen.
E) Canadian dollar increased relative to the U.S. dollar.
Answer: C
Diff: 1 Type: MC
Topic: Currency Appreciation and Depreciation
Learning Outcome: 14.1 Explain how the balance of payments is calculated
AACSB: Analytic Skills
Special Feature: Chapter Opener: COVID-19 Disrupts the Global Economy
3) Although based in the United States, Amazon is a global company with about ________ of its sales
outside of the United States by 2023.
A) 20 percent
B) 23 percent
C) 50 percent
D) 70 percent
E) 80 percent
Answer: B
Diff: 1 Type: MC
Topic: Currency Appreciation and Depreciation
Learning Outcome: 14.1 Explain how the balance of payments is calculated
AACSB: Analytic Skills
Special Feature: Chapter Opener: COVID-19 Disrupts the Global Economy
1
, 4) Many Canadian natural resource companies operate mines in other countries. What impact would an
expansionary monetary policy undertaken by the Bank of Canada have on these companies?
A) Expansionary monetary policy would encourage these firms to borrow abroad.
B) Expansionary monetary policy would make hiring in Canada easier for these firms.
C) Expansionary monetary policy would raise the tax bill for these firms.
D) Expansionary monetary policy would reduce the value of the profits earned in other countries.
E) Expansionary monetary policy will make it more difficult for these firms to raise funds in Canada.
Answer: D
Diff: 1 Type: MC
Topic: Monetary Policy
Learning Outcome: 14.1 Explain how the balance of payments is calculated
AACSB: Reflective Thinking
5) Suppose Norway decides to sell its large holdings of Canada bonds. If you are thinking of financing
your new car, how would Norway's action affect your decision to refinance?
A) You would want to finance as soon as possible as interest rates should rise.
B) You would want to wait to finance as interest rates should rise.
C) You would want to wait to finance as interest rates should fall.
D) You would want to wait to finance as it will likely be easier to qualify for a loan.
E) Norway's actions should not affect your decision to refinance in any way.
Answer: A
Diff: 2 Type: MC
Topic: Changes in Bond Holdings and Interest Rates
Learning Outcome: 14.1 Explain how the balance of payments is calculated
AACSB: Reflective Thinking
Special Feature: Economics in Your Life and Career: The South Korean Central Bank and Your Car Loan
6) An open economy is an economy that has
A) interactions in trade or finance with other countries.
B) its own stock market.
C) governmental regulations regarding public information that is included in corporate finance reports.
D) governmental regulations regarding the number of hours retail establishments must remain open on a
daily basis.
E) imposes no tariffs on international trade.
Answer: A
Diff: 1 Type: MC
Topic: Closed vs. Open Economies
Learning Outcome: 14.1 Explain how the balance of payments is calculated
AACSB: Reflective Thinking
2
** All Chapters included
,Table of Contents are given below
1.Economics: Foundations and Models
2.Trade-offs, Comparative Advantage, and the Market System
3.Where Prices Come From The Interaction of Supply and Demand
4.GDP Measuring Total Production and Income
5.Unemployment and Inflation
6.Economic Growth, the Financial System, and Business Cycles
7.Long-Run Economic Growth Sources and Policies
8.Aggregate Expenditure and Output in the Short Run
9.Aggregate Demand and Aggregate Supply Analysis
10.Money, Banks, and the Bank of Canada
11.Monetary Policy
12.Fiscal Policy
13.Inflation, Unemployment, and Bank of Canada Policy
14.Macroeconomics in an Open Economy
,The test bank is organized in reverse order, with the last chapter displayed first, to ensure
that all chapters are included in this document. (Complete Chapters included Ch14-1)
Macroeconomics, 5Ce (Hubbard)
Chapter 14 Macroeconomics in an Open Economy
14.1 Explain how the balance of payments is calculated
1) An economy that has interactions in trade or finance with other economies is referred to as
A) an open economy.
B) a closed economy.
C) a trade-balanced economy.
D) a net foreign investment economy.
E) a market economy.
Answer: A
Diff: 1 Type: MC
Topic: Closed vs. Open Economies
Learning Outcome: 14.1 Explain how the balance of payments is calculated
AACSB: Reflective Thinking
2) In 2020, global profit for Amazon was $820 million higher when measured in dollars than when
measured in local currencies. The reason for this discrepancy is that value of the
A) euro decreased relative to the British pound.
B) British pound increased relative to the U.S. dollar.
C) U.S. dollar increased relative to most other currencies.
D) U.S. dollar decreased relative to the Japanese yen.
E) Canadian dollar increased relative to the U.S. dollar.
Answer: C
Diff: 1 Type: MC
Topic: Currency Appreciation and Depreciation
Learning Outcome: 14.1 Explain how the balance of payments is calculated
AACSB: Analytic Skills
Special Feature: Chapter Opener: COVID-19 Disrupts the Global Economy
3) Although based in the United States, Amazon is a global company with about ________ of its sales
outside of the United States by 2023.
A) 20 percent
B) 23 percent
C) 50 percent
D) 70 percent
E) 80 percent
Answer: B
Diff: 1 Type: MC
Topic: Currency Appreciation and Depreciation
Learning Outcome: 14.1 Explain how the balance of payments is calculated
AACSB: Analytic Skills
Special Feature: Chapter Opener: COVID-19 Disrupts the Global Economy
1
, 4) Many Canadian natural resource companies operate mines in other countries. What impact would an
expansionary monetary policy undertaken by the Bank of Canada have on these companies?
A) Expansionary monetary policy would encourage these firms to borrow abroad.
B) Expansionary monetary policy would make hiring in Canada easier for these firms.
C) Expansionary monetary policy would raise the tax bill for these firms.
D) Expansionary monetary policy would reduce the value of the profits earned in other countries.
E) Expansionary monetary policy will make it more difficult for these firms to raise funds in Canada.
Answer: D
Diff: 1 Type: MC
Topic: Monetary Policy
Learning Outcome: 14.1 Explain how the balance of payments is calculated
AACSB: Reflective Thinking
5) Suppose Norway decides to sell its large holdings of Canada bonds. If you are thinking of financing
your new car, how would Norway's action affect your decision to refinance?
A) You would want to finance as soon as possible as interest rates should rise.
B) You would want to wait to finance as interest rates should rise.
C) You would want to wait to finance as interest rates should fall.
D) You would want to wait to finance as it will likely be easier to qualify for a loan.
E) Norway's actions should not affect your decision to refinance in any way.
Answer: A
Diff: 2 Type: MC
Topic: Changes in Bond Holdings and Interest Rates
Learning Outcome: 14.1 Explain how the balance of payments is calculated
AACSB: Reflective Thinking
Special Feature: Economics in Your Life and Career: The South Korean Central Bank and Your Car Loan
6) An open economy is an economy that has
A) interactions in trade or finance with other countries.
B) its own stock market.
C) governmental regulations regarding public information that is included in corporate finance reports.
D) governmental regulations regarding the number of hours retail establishments must remain open on a
daily basis.
E) imposes no tariffs on international trade.
Answer: A
Diff: 1 Type: MC
Topic: Closed vs. Open Economies
Learning Outcome: 14.1 Explain how the balance of payments is calculated
AACSB: Reflective Thinking
2
