Macroeconomics
6. A country has a current account defcit. This means that:
A. the country has a capital and fnancial account defcit. B. the country is operating in an inflationary gap. C. the country has a capital and fnancial account surplus. D. the country is operating in a recessionary gap. 7. What is the role of a central bank in a country with a fxed exchange rate?
A. Set the fscal policy. B. Regulate the price of the national currency.
C. Improve the terms of trade. D. Subsidize local producers. 8. An American producer buys steel from Japan. Howdoes this affect the foreign exchange rate market? A. The supply of the U.S. dollar increases, and the demand for the Japanese yen increases. B. The supply of the U.S. dollar decreases, and the demand for the Japanese yen increases. C. The supply of the U.S. dollar increases, and the demand for the Japanese yen decreases. D. The supply of the U.S. dollar decreases, and the demand for the Japanese yen decreases.
9. When is currency appreciation welcomed?
A. The country has a current account defcit. B. The country is in a recession. C. The country has a high unemployment rate. D. The country has a high inflation rate. 10. What is a consequence of a fall in the international price of the U.S. dollar?
A. A rise in the U.S. current account defcit B. A fall in the foreign currency price of American exports
C. A fall in the American price level D. A rise in American unemployment
Review Quiz Answers 1. C 2. D 3. B 4. A 5. B 6. C 7. B 8. A 9. D 10. B
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