ECON5327_Q4_key_2009

ECON5327_Q4_key_2009 - ECON 5327 Quiz #4 1. The assumptions...

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Quiz #4 1. The assumptions of the flexible-price monetary model imply: a) the exchange rate is fixed. b) the real exchange rate overshoots. c) real interest rates are equal internationally. d) the trade balance is zero. 2. The sticky-price monetary model implies that an increase in the foreign money supply will have what effect on the domestic currency? a) Appreciation. b) Depreciation. c) No change. d) None of the above. 3. The sticky-price monetary model implies that an increase in the domestic nominal interest rate will have what effect on the domestic currency? a) Appreciation. b) Depreciation. c) No change. d) None of the above. 4. Under the assumptions of the portfolio-balance model, a change in the domestic nominal interest rate reflects a change in what underlying variable. a) Real interest rate. b) Expected inflation. c) Real output. d) None of the above. 5. The assumption that is relaxed in the overshooting model is: a) PPP. b)
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This note was uploaded on 10/18/2009 for the course ECON Econ 5327 taught by Professor Crowder during the Spring '09 term at UT Arlington.

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ECON5327_Q4_key_2009 - ECON 5327 Quiz #4 1. The assumptions...

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