ECON 2H03 Lecture Notes - Lecture 21: Exchange Rate
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1) Suppose inflation in Mexico goes from 4% to 3% over the year. What will be the immediate impact on Mexico's balance of trade?
A |
increase |
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B |
decrease |
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C |
remain constant |
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D |
cannot be determined |
reasoning?
2) If Great Britain imports more than it exports, then
A |
the supply of pounds is likely to exceed the demand for pounds in the foreign exchange market. |
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B |
the demand for pounds is likely to exceed the supply for pounds in the foreign exchange market. |
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C |
the pound will likely appreciate against other major currencies in the foreign exchange market. |
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D |
none of the above |
1. If government tax policy requires Jane to pay $28,000 in taxes on an annual income of $200,000 and Mary to pay $10,000 in tax on the annual income of $100,000, then the tax policy is:
regressive. |
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progressive. |
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proportional. |
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optional. |
2. When increasing oil prices cause aggregate supply to shift to the left, then:
unemployment and inflation decrease. |
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unemployment decreases and inflation increases. |
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unemployment and inflation increase. |
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unemployment increases and inflation decreases. |
3. What do goods like gasoline, tobacco, and alcohol typically share in common?
A progressive tax is imposed on each of them. |
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A regressive tax is imposed on each of them. |
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They are all subject to government excise taxes. |
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They are all subject to government fiscal taxes. |
4. When inflation begins to climb to unacceptable levels in the economy, the government should:
use contractionary fiscal policy to shift aggregate demand to the right. |
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use contractionary fiscal policy to shift aggregate demand to the left. |
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use expansionary fiscal policy to shift aggregate demand to the right. |
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use expansionary fiscal policy to shift aggregate demand to the left. |