Econ 202 Exam 3

Nominal wages

According to the monetary neutrality which of the following is influenced by monetary factors?

The U.S. has a trade surplus of $50 billion.

If U.S. exports are $150 billion and U.S. imports are $100 billion, which of the following is correct?

increase the price level.

Monetary neutrality implies that an increase in the quantity of money will

does not hold in the short run.

Most economists believe that money neutrality

Neither the U.S. nor the U.K.

A U.S. company uses U.K. pounds it already owned to purchase bonds issued by a company in the U.K. Which of these countries has an increase in net capital outflow?

a shift in the short run aggregate supply curve

A change in the expected price level is likely to cause which of the following?

net capital outflow must be negative and saving is smaller than investment.

A country has a trade deficit. Its

1.5

If M= 6,000, P= 3, and Y= 3,000, what is velocity?

decreases, and U.S. net capital outflow decreases.

If U.S. citizens decide to save a smaller fraction of their incomes, U.S. domestic investment

its supply of but not its demand for loanable funds shifts.

If a country raises its budget deficit then

$100 billion and the U.S. has a trade deficit

If domestic residents of other countries purchase $600 billion of U.S. assets and U.S residents purchase $500 billion of foreign assets, then U.S. net capital outflow is

it engages in foreign direct investment. By itself this action raises U.S. net capital outflow.

If the American company Stryker builds and operates a new factory in France

shortage in the market for foreign-currency exchange, so the real exchange rate would appreciate.

If the U.S. raised its tariff on tires, then at the original exchange rate there would be a

10 and your purchase will increase Brazil's net exports.

If the exchange rate is 2 Brazilian reals per dollar and a meal in Rio costs 20 reals, then how many dollars does it take to buy a meal in Rio?

supply of money that is represented by the distance between points A and B.

If the money supply is MS2and the value of money is 2, then there is an excess

the value of money but not the real interest rate.

In the long run, money demand and money supply determine

r3 and e1

Suppose the Mexican economy starts at r2 and e2. Which of the following new equilibrium is consistent with capital flight?

decreased or Congress made a substantial increase in the minimum wage.

The long-run aggregate supply curve would shift left if the amount of labor available

how output deviates in the short run from its long run natural rate.

The mathematical equation: quantity of output supplied = natural rate of output + a(actual price level - expected price level), expresses

Y2

The natural rate of output occurs at

depreciates and net exports rise.

When a country experiences capital flight its currency

net exports fall, which decreases the aggregate quantity of goods and services demanded.

When the dollar appreciates, U.S.

left, raising the price level.

When the money market is drawn with the value of money on the vertical axis, an increase in the money supply shifts the money supply curve to the

decreases, so the value of money rises

When the price level falls, the number of dollars needed to buy a representative basket of goods

A U.S. based restaurant chain opens new restaurants in India.

Which of the following is an example of U.S. foreign direct investment?

an increase in the expected price level

Which of the following shifts short-run aggregate supply left?

investment expenditures

Which part of real GDP fluctuates most over the course of the business cycle?