1) figure 13.3. u.s. capital and financial account under a fixed exchange rate
system
refer to figure 13.3. if the political and economic stability of foreign countries worsens
relative to that of the united states, the u.s. capital and financial account schedule would
shift downward from ca0 to ca1, resulting in net financial outflows from the united
states.
a.true
b.false
2) starting from a position where the nation’s money demand equals the money supply,
and its balance of payments is in equilibrium, economic theory suggests that the
nation’s balance of payments would move into a deficit position if there occurred in the
nation a:
a.decrease in the money supply
b.increase in the money demand
c.decrease in the money demand
d.none of the above
3) the majority of developing-nation exports are primary products such as agricultural
goods and raw materials; of the manufactured goods exported by developing nations,
most are labor-intensive goods.
a.true
b.false
4) the terms of trade represents the rate of exchange between a country’s exports and
imports.
a.true
b.false
5) which policy is an expenditure-switching policy?
a.increase in the money supply
b.decrease in government expenditures
c.increase in business and household taxes
d.decrease in import tariffs
6) which device has the european union used to equalize farm-product import prices
with politically determined european union prices, regardless of shifts in world prices?
a.variable levies
b.import quotas
c.import subsidies
d.domestic content regulations
7) the commodity credit corporation makes available export credit financing for u.s.
agricultural exports.
a.true
b.false
8) given a system of floating exchange rates, assume that boeing inc. of the united states
places a large order, payable in yen, with a japanese contractor for jet engine parts. the
immediate effect of this transaction will be a shift in the:
a.supply curve of yen to the left which causes the dollar to appreciate against the yen
b.supply curve of yen to the right which causes the dollar to depreciate against the yen
c.demand curve for yen to the left which causes the dollar to appreciate against the yen
d.demand curve for yen to the right which causes the dollar to depreciate against the
yen
9) economic integration is the process of eliminating restrictions on international trade,
payments, and factor mobility.
a.true
b.false
10) the supply schedule of pesos has a negative-sloping region corresponding to the
inelastic region on the mexican demand schedule for foreign currency.
a.true
b.false