Homework help!!! MacroEconomics

Posted on 2014-04-01 11:22:00 in Economics by MIKE

1. In 2012, Cote d’Ivore had $3 billion of net exports and bought $1 billion of goods from foreign countries. What were Cote d’Ivore’s components of net exports?

a. $4 billion in exports and $1 billion in imports

b. $3 billion in imports and $2 billion in exports

c. $2 billion in exports and $3 billion in imports

d. $1 billion in imports and $3 billion in exports



2. A Canadian computer maker sells computers to a German firm. This company uses all of the revenues from this sale to purchase stock in a German company. What happens to Canadian net exports and net foreign investment due to these transactions?

a. They will increase both Canadian net exports and Canadian net foreign investment.

b. They will decrease both Canadian net exports and Canadian net foreign investment.

c. They will increase Canadian net exports and will decrease Canadian net foreign

investment.

d. They will decrease Canadian net exports and will increase Canadian net foreign

investment.

3 Starting from a trade surplus, which of the following would create a trade deficit?

a. a decline in saving and investment

b. a rise in saving and investment

c. a decline in saving and a rise in investment

d. a rise in saving and a decline in investment



4. If a country has business opportunities that become relatively attractive to other countries, which of the following best predicts the effects of this change?

a. Both net exports and net capital outflow increase.

b. Both net exports and net capital outflow decrease.

c. Net exports increase, but net capital outflow decreases.

d. Net exports decrease, but net capital outflow increases.

5. Exchange rates are 0.98 U.S. dollars per Canadian dollar, 150 yen per Canadian dollar, 0.8 euro per Canadian dollar, and 20 pesos per Canadian dollar. A bottle of beer in New York costs 6 U.S. dollars, 1200 yen in Tokyo, 7 euros in Munich, and 100 pesos in Cancun. Which of the following indicates the most expensive beer?

a. Cancun

b. New York

c. Tokyo

d. Munich

6. Suppose that a bushel of wheat costs $5 in Canada and costs 50 pesos in Mexico. If the nominal exchange rate is 30 pesos per dollar, what is the real exchange rate?

a. 1/3

b. 1

c. 3

d. 10



7. Which of the following is the most likely effect of an appreciation of the Canadian real exchange rate on the quantity of Alberta beef demanded by French citizens?

a. French citizens will buy less of Alberta beef.

b. French citizens will buy more of Alberta beef.

c. The quantity of Alberta beef demanded by French citizens will not change because the nominal exchange rate has not changed.

d. The quantity of Alberta beef demanded by French citizens will not change because it is the French real interest rate that matters for French citizens.

8. According to purchasing-power parity, if prices in Canada increase by a smaller percentage than prices in Algeria, how does the exchange rate change?

a. The real exchange rate, defined as Algerian goods per unit of Canadian goods, rises.

b. The real exchange rate, defined as Algerian goods per unit of Canadian goods, falls.

c. The nominal exchange rate, defined as Algerian currency per dollar, rises.

d. The nominal exchange rate, defined as Algerian currency per dollar, falls.



9. Which of the following best explains the relationship among price levels, nominal and real exchange rates, and money supply in Canada and Ireland when purchasing-power parity holds?

a. When the price level in Canada falls more rapidly than that in Ireland, the real

exchange rate, defined as Irish goods per unit of Canadian goods, stays the same.

b. When the money supply in Canada rises more rapidly than in Ireland, the nominal

exchange rate, defined as euros (the currency used in Ireland) per dollar, increases.

c. When prices for the same goods are the same in Canadian dollars in Canada and

Ireland, the nominal exchange rate does not change.

d. When prices in both countries stay the same and the nominal exchange rate

increases, the real exchange rate decreases.



10. If the world real interest rate exceeds the Canadian real interest rate, what would Canadian savers most likely do?

a. Canadian savers would prefer to buy foreign assets.

b. Canadian savers would prefer to buy Canadian assets.

c. Canadian savers will prefer to wait until the two real interest rates are again equal.

d. Canadian savers will sell their foreign assets and buy Canadian assets instead.



Answer will be rewarded. Thanks a ton in advance!!

---

Answer Comment

No Answers Posted Yet.