Econ 2020 Assignment 4: Exchange Rates and Macroeconomics, Assignments of Introduction to Macroeconomics

Download Econ 2020 Assignment 4: Exchange Rates and Macroeconomics and more Assignments Introduction to Macroeconomics in PDF only on Docsity! Econ 2020 Instructor: Jing Cai Assignment 4 Due: Wednesday, Apr 18, 2007, at 5314 Friedmann Hall, from 10am to 12:15pm (Problems 1-20 worth 0.5 pt each) 1. The nominal exchange rate is the a. nominal interest rate in one country divided by the nominal interest rate in the other country. b. rate at which a person can trade the currency of one country for the currency of another. c. price of a good in one country divided by the price of the same good in another. d. the number of goods a person can trade for a similar good in another country. 2. If you were told that the exchange rate was 1.2 Canadian dollars per U.S. dollar, a watch that costs $12 US dollars would cost a. $8.5 Canadian dollars. b. $10 Canadian dollars. c. $12.20 Canadian dollars. d. $14.40 Canadian dollars. 3. If you go to the bank and notice that a dollar buys more Mexican pesos than it used to, then the dollar has a. appreciated. Other things the same, the appreciation would make you less likely to travel to Mexico. b. appreciated. Other things the same, the appreciation would make you more likely to travel to Mexico. c. depreciated. Other things the same, the depreciation would make you less likely to travel to Mexico. d. depreciated. Other things the same, the depreciation would make you more likely to travel to Mexico. 4. Which of the following statements is correct for an open economy with a trade surplus? a. The trade surplus cannot last for very many years. b. The trade surplus must be offset by negative net capital outflow. c. The trade surplus implies that the country's national saving is greater than domestic investment. d. None of the above is correct. 5. If the exchange rate is 5 units of Peruvian currency per dollar and a hotel room in Lima costs 300 units of Peruvian currency, how many dollars do you need to get a room? a. 1,500, and your purchase will increase Peru's net exports. b. 60 and your purchase will increase Peru's net exports. c. 1,500 and your purchase will have no effect on Peru's net exports. d. 60 and your purchase will have no effect on Peru's net exports. 6. Which of the following did not happen during the onset of the Great Depression? a. The money supply fell as households took money out of bank deposits. b. The Fed conducted expansionary monetary policy. c. Stock prices fell about 90 percent. d. Disruption of the banking system made it difficult for some firms to obtain funds for investment. 7. The economic boom of the early 1940s resulted mostly from a. increased government expenditures. b. falling prices of oil and other natural resources. c. an increase in the growth rate of the money supply. d. rapid developments in transportation, electronics, and communication. 8. In the short-run an increase in the costs of production makes a. output and prices rise. b. output rise and prices fall. c. output fall and prices rise. d. output and prices fall. 9. In the mid-1970s the price of oil rose dramatically. This a. shifted aggregate supply left. b. caused U.S. prices to fall. c. was the consequence of OPEC increasing oil production. d. All of the above are correct. 10. Which of the following explains why production rises in most years? a. increases in the labor force b. increases in the capital stock c. advances in technological knowledge d. All of the above are correct. 11. During a recession the economy experiences a. rising employment and income. b. rising employment and falling income. c. rising income and falling employment. d. falling employment and income. 12. Most economists believe that after a few years, changes in the money supply change a. only nominal variables, but not real variables. b. only real variables, but not nominal variables. c. neither nominal nor real variables. d. both nominal and real variables. 13. The model of aggregate demand and aggregate supply explains the relationship between a. the price and quantity of a particular good. b. unemployment and output. c. wages and employment. d. real GDP and the price level. 14. Other things the same, an increase in the price level makes consumers feel a. less wealthy, so the quantity of goods and services demanded falls. b. less wealthy, so the quantity of goods and services demanded rises. c. more wealthy, so the quantity of goods and services demanded rises. d. more wealthy, so the quantity of goods and services demanded falls.