macroeconomics

At the point as which it is currently producing, Britain must give up the production of 75 hats to produce 25 additional sweater. The opportunity sort of producing 3 hats is ________ sweater(s). A) 1 B) 3 C) 22 D) 28

A) 1

Suppose that Country B wants to undervalue its currency. It does so because it want to increase its ________ and accomplishes the task by ________ . A) Exports; Supplying its currency to the Foreign Exchange Market. B) Imports; Supplying its currency to the Foreign Exchange Market. C) Exports; Demanding its currency from the Foreign Exchange Market. D) Imports; Demanding its currency from the Foreign Exchange Market.

A) Exports; Supplying its currency to the Foreign Exchange Market.

Suppose that Country B is going as described in question 34. A) It must accept that it is holding an asset that pays no interest income and will likely decrease in value over time. B) It is delighted that it is holding an asset that pays reasonable interest income and will likely increase in value over time. C) It is unhappy to be holding an asset that pays no interest income but i encouraged that at least it is likely to increase in value over time. D) It is happy to be holding an asset that ays reasonably interest income but it is not pleased that it is like to decrease in value over time.

A) It must accept that it is holding an asset that pays no interest income and will likely decrease in value over time.

In a single growing season, the country of Pastoral can raise 100 tons of beef or produce 1,000 boxes of tulips. In the same growing season, the country of Bucolic can raise 50 tons of beef or produce 750 boxes of tulips. We know that: A) Pastoral has the comparative advantage in raising beef. B) Pastoral has the comparative advantage in raising tulips. C) Bucolic has the comparative advantage in raising beef. D) Bucolic has the absolute advantage in raising beef.

A) Pastoral has the comparative advantage in raising beef.

Since the United States imports a large quantity of textiles from Asia, the overall wages of U.S. textile workers has ________ , while the price of textiles in the United States has ________ . A) decreased; decreased B) increased; decreased C) decreased; increased D) increased; not changed

A) decreased; decreased

A floating exchange rate is: A) determined by the market. B) set by the government. C) set by the International Monetary Fund. D) determined by the UN.

A) determined by the market.

The quantity of the U.S. dollars demanded in the foreign exchange (4x) market depends in part on: A) foreign purchases of U.S. goods and services. B) U.S. purchases of foreign goods and services. C) U.S. investment in foreign companies. D) U.S. purchases of foreign assets.

A) foreign purchases of U.S. goods and services.

Goods and services purchased from abroad are ________ ; goods and services sold abroad are ________ . A) imports; exports B) tariffs; import quotas C) exports; imports D) import quotas; tariffs

A) imports; exports

The job creation argument for protection against free trade: A) is that keeping out foreign imports allows the goods and services to be produced by domestic workers. B) is an argument against free trade frequently put forward by economists. C) is mostly that we need full employment to better defend the security of the nation. D) is that we need full employment to prevent currency depreciation.

A) is that keeping out foreign imports allows the goods and services to be produced by domestic workers.

Lower wages in China reflect ________ labor productivity in China. This means that is the United States moved high-tech industries to China, the overall cost of production would be ________ in China than in the United States. A) lower; higher B) lower; lower C) higher; higher D) higher; lower

A) lower; higher

Adopting a floating exchange rate regime: A) makes the domestic economy less susceptible to inter nation business cycles. B) limits the use of monetary policy for economic stabilization purposes. C) makes the domestic economy more susceptible to international business cycles. D) commits the country to maintaining low inflation rates.

A) makes the domestic economy less susceptible to inter nation business cycles.

Which of the following is a common argument for trade protection? A) national security B) increased efficiency C) increased profitability D) increased productivity

A) national security

A floating exchange rate: A) retains the ability of monetary policy to help stabilize the economy. B) reduces the ability of monetary policy to stabilize the economy. C) reducers the uncertainty faced by business firms. D) makes foreign goods easier to price.

A) retains the ability of monetary policy to help stabilize the economy.

When the dollar value of the euro is high: A) travel in the U.S. is less expensive for Europeans. B) travel in the U.S. is more expensive for Europeans. C) the dollar has appreciated. D) travel in Europe is less expensive for Americans.

A) travel in the U.S. is less expensive for Europeans.

Id there is a significant increase in taxes in the U.S. but not in the European Union then the US$ will ________ and the euro will ________ . A) Appreciate; Appreciate B) Appreciate; Depreciate C) Depreciate; Depreciate D) Depreciate; Appreciate

B) Appreciate; Depreciate

If the is an increase in inflation in the European Union then the US$ will ________ and the euro will ________ . A) Appreciate; Appreciate B) Appreciate; Depreciate C) Depreciate; Depreciate D) Depreciate; Appreciate

B) Appreciate; Depreciate

Suppose that Europeans begin to view American assets, like bonds, as more attractive investments than European assets. Which of the following is likely to be the next series of events? A) a depreciation of the dollar, which will raise U.S. exports B) an appreciation of the dollar, which will discourage Europeans from buying American goods and services C) a depreciation of the dollar, which will lower U.S. exports D) a depreciation of the dollar, which will make Europeans buy more American products

B) an appreciation of the dollar, which will discourage Europeans from buying American goods and services

A tariff imposed on Japanese imports into the United Stated tends to: A) penalize U.S. producers and benefit Japanese producers. B) benefit U.S. producers and penalize Japanese producers. C) penalize both U.S. and Japanese producers. D) benefit both U.S. and Japanese producers.

B) benefit U.S. producers and penalize Japanese producers.

The infant industry argument for trade protection essentially states that: A) small, traditional industries such as handicrafts should be protected from foreign competition or they would not be able to survive. B) new industries should be protected temporarily from foreign competition until the become established. C) industries that provide day care for their employees' children ought to be protects from foreign competition. D) industries that produce products essential for the well-being of infants (e.g. the baby food industry) ought to be protected, since sigh products are essential for the good health of future generations.

B) new industries should be protected temporarily from foreign competition until the become established.

When the dollar appreciates relative to the Canadian dollar, then: A) Canadian goods become more expensive here. B) out goods become more expensive in Canada. C) we tend to but more from Canada since we have a weak currency. D) we sell more goods to Canada.

B) out goods become more expensive in Canada.

A fixed exchange rate is: A) determined by the market. B) set by the government. C) set by the International Monetary Fund. D) determined by the UN.

B) set by the government.

Supposed that the United States is experiencing an economic boom and GDP in the United States grows is growing faster than GDP in the European Union. We can anticipate that A) the euro will depreciate and the EU will buy more goods from the United States. B) the euro will appreciate and the EU will buy more goods from the United States. C) the euro will depreciate and the EU will buy fewer goods from the United States. D) the euro will appreciate and the EU will buy fewer goods from the United States.

B) the euro will appreciate and the EU will buy more goods from the United States.

When the value of the euro changes from $1.30 to $1.20 it follows that in the future: A) European Union imports from the Untied States increase. B) U.S. exports to the European Union increase. C) U.S. imports from the European Union increase. D) European Union exports to the United States decrease.

C) U.S. imports from the European Union increase.

Countries that engage in trade will tend to specialize in good in which they have a(n) ________ and will ________ those goods. A) comparative advantage, import B) absolute advantage; export C) comparative advantage; export D) economic profit; import

C) comparative advantage; export

The exchange rate is the: A) interest rate differential between countries. B) balance of trade differential between countries. C) relative price of currencies between countries. D) relative price of gold between countries.

C) relative price of currencies between countries.

If the executives of the U.S. silicon-chip industry lobby Congress for protection from imports on the grounds that the military should have an unrestricted domestic supply of silicon chips, they are using: A) the infant industry argument. B) the job creation argument. C) the national security argument. D) the model industry argument.

C) the national security argument.

If the British pound appreciates against the dollar, this will make: A) British imports and exports more expensive. B) American import and exports more expensive. C) British imports and exports less expensive. D) British exports more expensive but lower the price of American exports to Britain.

D) British exports more expensive but lower the price of American exports to Britain.

Suppose that both Country A and Country B are doing as described in question 33 and 34 and that they are just 2 countries among 100 that do business through the Foreign Exchange Market. A) Country A and Country B can do so without having to worry about running out of foreign exchange reserves and actions taken by currency speculators. B) Country A and Country B cannot do so without having to worry about running out of foreign exchange reserves and actions taken by currency speculators. C) Country A can do so without having to worry about running out of foreign exchange reserves and actions taken by currency speculators but Country B cannot. D) Country B can do so without having to worry about running out of foreign exchange reserves and actions taken by currency speculators but Country A cannot.

D) Country B can do so without having to worry about running out of foreign exchange reserves and actions taken by currency speculators but Country A cannot.

If interest rates increase in the European Union then the US$ will ________ and the euro will ________ . A) Appreciate; Appreciate B) Appreciate; Depreciate C) Depreciate; Depreciate D) Depreciate; Appreciate

D) Depreciate; Appreciate

If the U.S. Federal Reserve Bank increases the money supply then the US$ will ________ and the euro will ________ . A) Appreciate; Appreciate B) Appreciate; Depreciate C) Depreciate; Depreciate D) Depreciate; Appreciate

D) Depreciate; Appreciate

If there is an increase in Yus then the US$ will ________ and the euro will ________ . A) Appreciate; Appreciate B) Appreciate; Depreciate C) Depreciate; Depreciate D) Depreciate; Appreciate

D) Depreciate; Appreciate

With floating exchange rates: A) Domestic Fiscal Policy and Domestic Monetary Policy are weaker. B) Domestic Fiscal Policy and Domestic Monetary Policy are stronger. C) Domestic Fiscal Policy is stronger but Domestic Monetary Policy is weaker. D) Domestic Fiscal Policy is weaker but Domestic Monetary Policy is stronger.

D) Domestic Fiscal Policy is weaker but Domestic Monetary Policy is stronger.

Suppose that Country A wants to overvalue its currency. It does so because it wants to increase its ________ and accomplishes the task by ________ . A) Exports; Supplying its currency to the Foreign Exchange Market. B) Imports; Supplying its currency to the Foreign Exchange Market. C) Exports; Demanding its currency from the Foreign Exchange Market. D) Imports; Demanding its currency from the Foreign Exchange Market.

D) Imports; Demanding its currency from the Foreign Exchange Market.

Taken collectively, people in nations that engage in international trade are NOT likely to: A) consume more than they were able to consume in the absence of trade. B) raise their standards of living. C) gain from lower opportunity costs of production. D) be made worse off.

D) be made worse off.

The main difference between a tariff and a quota is: A) a quota reduces imports more sharply than a tariff. B) a tariff will cause higher prices than a quota. C) a tariff will cause lower prices than a quota. D) none of the above.

D) none of the above.

An example of a tariff is a: A) limit on the total number of Honda automobiles imported from Japan. B) regulation specifying that each imported Honda automobile must meet certain emission exhaust guidelines. C) tax of $500 on each Honda automobile produced in the United States. D) tax of 10% of the value of each Honda automobile imported from Japan.

D) tax of 10% of the value of each Honda automobile imported from Japan.