econiemi macro unit 6

suppose the balance on the financial account is -300

+295 billion

trading possibilities curve suggest that the terms of trade are

1 beer for 1.5 pizza

which of the following would not be feasible terms for trade between singsong and harmony

1 chicken for 1/5 fish

refer to the diagram, at equilibrium exchange rate

1.25 euros will buy 1

if the exchange rate changes so that more Mexican pesos are required to buy a dollar, then

Americans will buy more Mexican goods

which one of the following might be a plausible explanation for the change in the dollar yen exchange rate cited in the previous question

Japan exported much more to the United States during this period than it imported from the US

research studies indicate that

US consumer lose more from tariffs than US producers gain

purchasing power parity theory of exchanges rates

a dollar, when converted to other currencies at the prevailing floating exchange rate, has the same purchasing power in various countries

us exports transactions create

a foreign demand for dollars and the satisfaction of this demand increases the supplies of foreign monies held by US banks

the fact that international specialization and trade based on comparative advantage can increase world output is demonstrated by the reality that

a nations trading possibilities line lies to the right of PPC

increased domestic employment argument for tariff protection holds that

an increase in tariffs will increase net exports and stimulate domestic employment

rightward shift of supply would

appreciate the dollar

oppruntity cost of producing

beer in west Lothian is .5 pizza

refer to diagram, the data contained in the ppc are based on assumption of

constant costs

other things equal, the financing of a US import transaction

decreases the supplies of foreign currency held by US banks

if a nation has a current account surplus and it does not have to make any in payments or out payments of official reserves, it must have a

deficit in its capital and financial account

refer to diagram, a rightward shift of demand would

depreciate the dollar

evidence of a chronic balance of payments deficit is

diminishing reserves of foreign currenccies

under managed floating system of exchange rates

exchange rates are essentially flexible, but governments intervene to offset disorderly fluctuations in rates

in the US balance of payments, foreign purchases of assets in the US are a

foreign currency outflow

other things equal, economics would prefer

free trade to tariffs and tariffs to import quotas

refer to above information, if these two nations specialize based on comparivte advantage

harmony will both produce chicken and catfish

country a limits other nations exports to country A to 1000 tons of coal. this is

import quota

depreciation of the dollar will

increase the prices of U.S. imports, but decrease the prices to foreigners of U.S. exports.

Suppose interest rates fall sharply in the US but are unchanged in great Britain. under a freely floating exchange rates, we can expect the demand for pounds in the US to

increase, the supply of pounds to decrease, and the dollar to depreciate relative to the pound

in considering euros and dollars, the rates of exchange for the euro and the dollar are

inversely directed

refer to the diagram, the size of import quota

is wy

the current system of exchanges rates can be best described as

managed floating exchange rates

The gain from international trade is

more goods than would be attainable through domestic production alone.

the financial account balance is a nations

sale of real and financial assets to people living abroad minus its purchases of real and financial assets from foreigners

under a system of floating exchange rates a U.S. trade deficit with Mexico will tend to cause

the United States govnermnet to ration pesos to US importers

which of the following will generate demand for Country X's currency in the foreign exchange market

the desire of foreigners to buy stocks and bonds of firms in country x

refer to diagram. the effect of the import quota on domestic price and consumption is

the same as that tariff of PcPa

refer to the above info, between 1985 and 2003

the yen appreciated in value relative to the dollar

canada has agreed to set an upper limit on the total amount of softwood lumbar sold to the United States. this is an

voluntary export restriction