6) Which of the following would be the most pessimistic with regard to the ability of the government to reduce unemployment by monetary of fiscal policy? a. Monetarists b. Keynesians c. rational expectations school d. Klingons e. supply-siders
7) Which of the following would tend to increase a country's imports?
a. an increase in the domestic rate of interest
b. an increase in the exchange rate ( i.e an increase in the price of foreign exchange)
c. an increase in domestic income
d. an increase in foreign prices
e. none of the above
8) Which of the following would decrease a country's exports ?
a. a decrease in the exchange rate( i.e a an decrease in the price of foreign exchange)
b. an increase in the domestic rate of interest
c. an increase in domestic price
d. an increase in domestic income
e. none of the above
9) Which of the following would indicate a conflict between the goals of full employment and balance of payments equilibrium ?
a. inflation and a balance of payments deficit
b. unemployment and a balance of payments surplus
c. unemployment and a balance of payments deficit
d. full employment and a balance of payments surplus
e. none of the above would indicate a conflict
10) Which of the following would result if the county's currency depreciated ? a. an increase in both imports and exports
b. a decrease in both imports and exports
c. an increase in imports and a decrease in exports
d. a decrease in imports and an increase in exports
e. a decrease in net capital inflows
11) Under the gold standard, if a nation had a balance of payments surplus, the difference would have been resolved by:
a. gold shipments from the surplus to the deficit country
b.gold shipments from the deficit to the surplus country
c. appreciation of the country's currency in the foreign exchange markets
d. depreciation of the country's currency in the foreign exchange markets
e. human sacrifices in the deficit country
12.Under a system of flexible exchange rates, if a nation had a balance of payments deficit, which of the following would occur ?
a. gold shipment from the surplus to the deficit country
b. gold shipments from the deficit to the surplus country
c. appreciation of the current in the foreign exchange markets
d. depreciation of the currency in the foreign exchange markets
e. the money supply increase
13. Depreciation of a country's currency would generally result in:
a. the aggregate demand curve shifting to the left
b. the aggregate demand curve shifting to the right
c. the aggregate supply curve shifting to the left
d. the aggregate supply curve shifting to the right.
e) both A and B
