333fl08practicefinal-2 - ECON 333 Practice cumulative final...

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ECON 333 Practice cumulative final exam questions MULTIPLE CHOICE.     1) 
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We can  expect  deviations  from PPP  because  of  
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1) 
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_______  A) 
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transportation  costs.  
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B)  dif fere
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quotas and  tariffs.  
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D)  All  of    2) 
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If the  exchange  rate is  equal to  the ratio  of the  domestic  and  foreign  price  indexes,  
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2)  ____ ___  a b s o l u t P P ho ld s.  on currency is said to be  undervalued.  
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one currency is  said to be overvalued.   D) 
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relative PPP  holds.       E) none of the above 3) 
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The euro  is said to  be selling  at a  ________  if the spot  dollar  price is  $1.18 and  the nine - month  forward  rate is  $1.16.  
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3)  ____ ___ 
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forward spread  
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B)  for war
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forward  premium  
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D)  no ne    4) 
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The  current  account is  equal to  
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4)  ____ ___ 
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C + I + G + X  
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B)  I + X  
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S - I  
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D)  T - G     5) 
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We  expect  PPP to  hold  better  
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5)  ____ ___  f o r   h i g h - in fla tio co un tri es.  in  the long run.  
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for annual data  than monthly data.   D) 
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All of the  above.       E)  none of the above 6) 
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The HO  model  assumes  that  ________  are  identical  between  countries. 
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6)  ____ ___ 
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This note was uploaded on 08/25/2009 for the course ECON 333 taught by Professor Yavas,cemilepan,lu during the Fall '06 term at Pennsylvania State University, University Park.

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333fl08practicefinal-2 - ECON 333 Practice cumulative final...

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