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Class 12 Economics (Macro Economics) Chapter 6 Open Economy Macroeconomics Quiz 3 (25 MCQs)

Quiz Instructions

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1. A country's trade balance
2. Which of the following statements is (are) correct? The Mundell-Fleming model is
3. Other things the same, if the dollar depreciates relative to the Japanese yen, then
4. Which of the following equations is always correct in an open economy?
5. A country has a trade deficit. Its
6. What does the EE curve in the Swan diagram represent?
7. What is the effect of a tight monetary policy on interest rates?
8. Suppose a U.S. resident buys a Jaguar automobile from Great Britain and the British exporteruses the receipts to buy stock in General Electric. Which of the following statements is truefrom the perspective of the United States?
9. Suppose the money supply in Mexico grows more quickly than the money supply in theUnited States. We would expect that
10. If a country has a trade surplus, then its NX>0 =) Y-C-I-G >0 =) Y > C+I+G S= Y-C-G =) S>I
11. A fall in the demand for U.S. exports would result in a rise in the exchange rate when
12. If a U.S. shirt maker purchases cotton from Egypt, U.S. net exports
13. Suppose that foreign citizens decide to purchase more U.S. pharmaceuticals and U.S. citizens decide to buy more stock in foreign corporations. Other things the same, these actions
14. Foreign-produced goods and services that are purchased domestically are called
15. A U.S. pharmacy buys drugs from a British company and pays for them with US dollars. This transaction
16. If citizens of a country are not saving much, it is better to
17. In an open economy, gross domestic product equals $ 1, 950 billion, government expenditure equals $ 280 billion, investment equals $ 500, and net capital outflow equals $ 280 billion. What is consumption expenditure?
18. Catherine, a citizen of Spain, decides to purchase bonds issued by Chile instead of ones issued by the United States even though the Chilean bonds have a higher risk of default. An economic reason for her decision might be that
19. What is the effect of a devaluation on domestic production?
20. In the Mundell-Fleming model, regardless of whether the economy has perfect capital mobility or not, an increase in the money supply
21. If the U.S. real exchange rate appreciates relative to the French franc, U.S. exports to France
22. Suppose that a ton of coal costs 1500 British pounds in the UK and $ 2000 in the United States. If the nominal exchange rate is .75 British pounds per dollar, the real exchange rate is
23. If U.S. consumers increase their demand for apples from New Zealand, then other things the same New Zealand's
24. What is the effect of expansionary fiscal policy on the IS curve?
25. What is the primary goal of internal balance?
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