Question # 00052867
Posted By: solutionshere
Updated on: 03/08/2015 02:07 PM Due on: 03/08/2015
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Question 19 of 25
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2.0 Points
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Other
fundamental things equal, a decrease in the exchange rate value of the
domestic currency will make domestic goods:
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A. to
be demanded more internationally.
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B.
less competitive in the international markets.
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C.
less expensive in the domestic market.
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D. less expensive to produce.
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Question 20 of 25
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2.0 Points
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Other
fundamental things equal, an increase in the exchange rate value of the
domestic currency will cause the current account to:
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A.
fluctuate initially.
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B.
equal the official settlements balance.
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C.
move toward a long-run surplus.
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D. move toward a deficit.
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Question 21 of 25
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2.0 Points
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Under a
floating exchange rate regime, an expansion in the money supply will:
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A.
induce financial capital to leave the country.
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B.
attract financial capital into the country.
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C.
have no effect on financial account balance.
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D. cause a surplus in the official settlements
balance.
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Question 22 of 25
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2.0 Points
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Under a
floating exchange rate regime, the domestic currency will normally depreciate
if the money supply:
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A.
contracts.
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B.
expands.
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C.
does not change with the change in the exchange rates.
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D. is managed to keep the country's inflation
rate steady.
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Question 23 of 25
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2.0 Points
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Under a
floating exchange rate regime, following an expansion in the money supply,
the change in the value of domestic currency is most likely to:
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A.
increase demand for imports.
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B.
increase demand for exports.
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C.
lower the real product.
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D. initiate foreign capital inflow.
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Question 24 of 25
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2.0 Points
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In Figure, the move from point A to B is caused by
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A.
expansionary monetary policy.
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B.
expansionary fiscal policy.
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C. contractionary monetary policy.
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D. contractionary fiscal policy.
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Question 25 of 25
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2.0 Points
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In figure, the shift of the FE curve from FE0 to FE1 was
caused by
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A. a
contractionary monetary policy.
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B.
official intervention in the foreign exchange market.
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C. an
improvement in current account position.
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D. an appreciation of the country's
currency.
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Solution: Homework 7