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Which economic indicators are used to measure the global economy? Check all that apply. 
a) Purchasing power parity 
b) trade volume 
c) spending power parity 
d) Labor market data 
e) Gross Domestic Product
f) trade deficit and surpluses

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Vaishnavi Kanukurti
Vaishnavi KanukurtiLv10
11 Sep 2020
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Related questions

a) According to the monetary approach to the exchange rate, with real money demands being constant in Sweden and the US, if Sweden's money supply is increasing at the annual rate of 5% and the US money supply is increasing at the annual rate of 2%, then:

a. the Swedish krona should be appreciating against the US dollar at an annual rate of less than 3% to take into account overshooting.

b. the Swedish krona should be appreciating against the US dollar at the annual rate of 3%.

c. the Swedish krona should be depreciating against the US dollar at an annual rate of greater than 3% to take into account overshooting.

d. the Swedish krona should be depreciating against the US dollar at the annual rate of 3%.

e. the Swedish krona should be depreciating against the US dollar at an annual rate of less than 3% to take into account undershooting.

 

b) Purchasing power parity is more likely to hold true when:

a. there are a large amount of non-traded goods.

b. there are high tariffs.

c. exchange rates are fixed and stable over a reasonably long time period.

d. exchange rates are flexible.

e. there are high transportation costs.

 

c) Suppose the basket of goods used for calculating the national price level, P, is the same as the basket of goods used for calculating P*. The formula P = EP* represents the existence of:

a. a real exchange rate value that, based on these measures for E, P, and P*, is not equal to one.

b. relative purchasing power parity but not absolute purchasing power parity.

c. absolute purchasing power parity but not relative purchasing power parity.

d. absolute purchasing power parity and relative purchasing power parity.

e. neither absolute purchasing power parity nor relative purchasing power parity.

To track the public debt over time and understand its significance to the economy, it is best

a) Examined relative to budget surpluses

b) Calculated relative to the money supply

c) Measured relative to the gross domestic product

d) To compare it to imports, exports, and the trade deficit

 

1.US manufacturers receive news that profits from current-period investments will be taxed at a higher rate. What effect will this have on the present US current account deficit? NOTE: A decrease in the current account deficit means the current account becomes less negative.

A. The current account deficit will likely decrease (become less negative)

B. The current account deficit will likely increase (become more negative)

C. This will have no effect on the US current account deficit

D. It's impossible to tell what effect this will have on the US current account deficit

 

2.Which of the following would be consistent with the hypothesis that US productivity growth is causing trade deficits:

A. Increases in stock prices over and above current earnings

B. Increased consumption as a ratio of GDP

C. Both

D. Neither

 

3.Evaluate the following statement using the model of trade deficits we learned in class: "Our country's trade deficit means that future generations will have to pay other countries back and will have less to consume than if we ran a balanced trade account". This statement is

A False: we can renege on our debts if they become too high.

B True: trade deficits means absolutely less consumption in future periods

C False: while in the future we will have to run trade surpluses if we run a trade deficit in the current period, increased investment means our absolute future consumption may be higher.

D True: trade deficits shift the share of consumption towards the current period and therefore the absolute consumption level in the future must be lower.

 

4.If a basket of goods in Home costs PH and PF in Foreign, and E is the price of the home currency in terms of the Foreign currency, which of the following is the Purchasing Power Parity equation?

A. PH = PF * E

B. PH / E = PF

C. PH * E = PF

D. PH / PF = E

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