U.s. businesses are demanders of foreign currencies because they need them to

3. (TCO 5) A fall in labor costs will cause aggregate (Points : 4)

       supply to increase. demand to increase. supply to decrease. demand to decrease.

Question 4. 4. (TCO 5) With cost-push inflation in the short run, there will be (Points : 4)

       an increase in real GDP. a leftward shift in the aggregate demand curve. a decrease in real GDP. a decrease in unemployment.

Question 5. 5. (TCO 6) With an MPS of .3, the MPC will be (Points : 4)

       1 - .3. .3 - 1. 1/.3. .3.

Question 6. 6. (TCO 7) The M1 money supply is composed of (Points : 4)

       all coins and paper money held by the general public and the banks. bank deposits of households and business firms. bank deposits and mutual funds. checkable deposits and currency in circulation.

Question 7. 7. (TCO 7) The basic requirement of money is that it be (Points : 4)

       backed by precious metals--gold or silver. authorized as legal tender by the central government. generally accepted as a medium of exchange. some form of debt or credit.

Question 8. 8. (TCO 7) How many members can serve on the Board of Governors of the Federal Reserve System? (Points : 4)

       Seven Nine 12 14

Question 9. 9. (TCO 7) Which of the following is the most important function of the Federal Reserve System? (Points : 4)

       Setting reserve requirements Controlling the money supply Lending money to banks and thrifts Acting as fiscal agent for the U.S. government

Question 10. 10. (TCO 7) The Federal funds rate is the rate that banks pay for loans from (Points : 4)

       the Fed. the U.S. Treasury. other banks. large corporations.

Question 11. 11. (TCO 7) The difference between Fed behavior during the Bank Panics of 1930-1933 and the Financial Crisis of 2007-2008 is that the Fed (Points : 4)

       was very active during the former crisis, while it was basically passive during the latter crisis. stood idly by during the former crisis, but took dramatic actions during the latter crisis. was not yet in existence during the 1930s. was a much bigger institution in the 1930s than it is today.

Question 12. 12. (TCO 7) Which monetary policy tool was created in response to the financial crisis of 2007-2008? (Points : 4)

       Discount rate Term auction facility Target federal funds rate Open market operations

Question 13. 13. (TCO 7) The most frequently used monetary device for achieving price stability is: (Points : 4)

       open market operations. the discount rate. the reserve ratio. the prime interest rate.

Question 14. 14. (TCO 8) Which of the following products is a leading import of the United States? (Points : 4)

       Grains Aircraft Petroleum Generating equipment

Question 15. 15. (TCO 8) The principal concept behind comparative advantage is that a nation should (Points : 4)

       maximize its volume of trade with other nations. use tariffs and quotas to protect the production of vital products for the nation. concentrate production on those products for which it has the lowest domestic opportunity cost. strive to be self-sufficient in the production of essential goods and services.

Question 16. 16. (TCO 8) If a nation imposes a tariff on an imported product, then the nation will experience a(n) (Points : 4)

       decrease in total supply and an increase in the price of the product. decrease in demand and a decrease in the price of the product. decrease in supply of, and an increase in demand for, the product. increase in supply of, and a decrease in demand for, the product.

Question 17. 17. (TCO 8) A key difference between import quotas and voluntary export restraints (VERs) is that the (Points : 4)

       domestic government administers the former, whereas the foreign government administers the latter. foreign government administers the former, whereas the domestic government administers the latter. one is a tax, whereas the other is a quantity limit. one raises the price of the imported product involved, whereas the other one does not.

Question 18. 18. (TCO 8) Tariffs and import quotas would benefit the following groups, except (Points : 4)

       consumers of the product. domestic producers of the product. workers in domestic firms producing the product. the government of the importing country.

Question 19. 19. (TCO 8) Which organization meets regularly to establish rules and settle disputes related to international trade? (Points : 4)

       The United Nations Commission on Trade Law The United Nations Conference on Trade and Development The World Trade Organization The Federal Reserve Board

Question 20. 20. (TCO 9) U.S. businesses are demanders of foreign currencies because they need them to (Points : 4)

       produce goods and services exported to foreign countries. pay for goods and services imported from foreign countries. receive interest payments from foreign governments. receive interest payments from foreign businesses.

Question 1. 1. (TCO 9) In the balance of payments statement, a current account surplus will be matched by a (Points : 4)

       capital and financial accounts deficit. capital and financial accounts surplus. trade deficit. trade surplus.

Question 2. 2. (TCO 9) Comparing everything that the United States owes to other nations, and what they owe to the United States, the United States is currently a(n) (Points : 4)

       net creditor. net debtor. international banking asset. international banking liability.

Question 3. 3. (TCO 9) Foreign exchange rates refer to the (Points : 4)

       price at which purchases and sales of foreign goods take place. movement of goods and services from one nation to another. price of one nation's currency in terms of another nation's currency. difference between exports and imports in a particular nation.

Question 4. 4. (TCO 9) When the exchange rate between pounds and dollars moves from $2 = 1 pound to $1 = 1 pound, we say that the dollar has (Points : 4)

       depreciated. appreciated. inflated. deflated.

Question 5. 5. (TCO 9) Proponents of the managed floating exchange rate system argue that it has (Points : 4)

       added the volatility needed by the exchange rate market. been effective because it is a "nonsystem" without fixed rules. been sufficiently flexible to weather major economic turbulence. resolved major problems in balance of payments surpluses and deficits.

Question 6. 6.

(TCO 8) a) Explain four problems with the argument that trade protection is needed to protect American jobs. b) Describe the economic reasons why businesses use offshoring.

(Points : 40)

Question 7. 7.

(TCO 6) a) Identify the four major tools of monetary policy. b) How can monetary policy address the problem of inflation?

(Points : 40)

0

0

429835621

36

429835622

39

429835602

429835623

41

429835624

43

MultipleChoice

429835626

48

429835627

50

9

429835629

52

429835630

55

429835631

58

0

429835634

3

429835636

5

429835639

7

0

429835642

12

429835646

429835604

429835648

Essay

3

10

429835606

15

429835607

17

429835609

20

429835611

23

429835614

25

429835616

30

429835618

33

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