Homework 4 - ' a.) UCONN - INTERNATIONAL TRADE NAME: 7...

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Unformatted text preview: ' a.) UCONN - INTERNATIONAL TRADE NAME: 7 (HA—J HOMEWORK ASSIGNMENT #4 DUE ON OR BEFORE 12/2/2010 I) The ability of a country to respond to a “shock” depends on whether it is a. Capitalistic or socialistic b. Eastern or western @ Open or closed d. Rigid or carefree 2) The dynamic approach to macroeconomics is also known as the a. intratemporai approach b. Intermezzo approach c. international approach @ Intertemporai approach 3) “living within your means” requires only that a country maintain a balance Between its trade deficits and surpluses b. Only borrow funds when times are good c. Only borrow funds when unemployment is low cl. Between fiscai poiicy and monetary policy 4) In international credit markets, the U.S. has been a. Borrowing at high rates and lending at iow rates b. Borrowing at high rates and lending at high rates c. Borrowing at low rates and lending at iow rates ((9 Borrowing at low rates and iending at high rates 5) Based on S&P ratings, Portugai has a. A better credit rating than Austria b. A better credit rating than Japan 6) A better credit rating than iceland CL A better credit rating than France 6) Emerging markets often experience in the flow of externai finance a. Sudden downpours @‘L Sudden stops c. Sudden acceierations d. Sudden takeoffs 7) Financial “openness” ailows countries to @r‘ Save for a rainy day b. Save for a sunny day c. Save for cloudy day d. Save for the past 8) State-owned asset management companies are also known as a. Southern wealth funds to. Systematic wealth funds c. Government wealth funds Qt) Sovereign wealth funds 9) The failure of significant capital flows from rich to poor countries is known as the a) Luciano Paradox b Lippencott Paradox @5 The Lucas Paradox d) The Lenotiff Paradox 10) Economists worried that poor countries will never catch up to rich countries due to productivity differences. They call this a.‘ Discrimination (t2) Divergence c. Diligence d. Dangerous 11) If we subtract foreign assets owned by domestic entities from domestic assets owned by foreign entities, we can determine a country’s External wealth - ' ' internal wealth inertial wealth Black market wealth we 12) can help countries smooth out shocks a. Divergence b. Convergence (Q Diversification d Unification 13} Since the 19805, the United States has been a 6) Net debtor nation is. Net creditor nation c. Neither a debtor or creditor nation d. Experiencing a rising surplus in its trade balance 14) Diversification may be hampered by the fact that a. investors speak different languages The number of assets is limited c. The number of liabilities is limited d. The number of liabilities is open ended 15) The organization designed to help poor countries to develop is the ® World Bank b. World Health Agency c. United Parcel Service d. National Endowment for Development 16) The idea oftrying to avoid sharp ups and down in household spending is called a. investment smoothing b. Government smoothing C63 Consumption smoothing d. Trade balance smoothing 17) Ifthe U.S. forgives the debts it is owed by Bolivia the transaction will be recorded in a. Bolivia’s account dealing with non—governmental foreign aid b. The U.S.’s current account @ The U.S.’s capitai account d. The U5. contemporary account 18) Which ofthe following items is not included in GNE? a. Personal consumption expenditures b. Gross private domestic investment c. Government purchases of goods and services @ Government transfer payments 19) if a country's GNE exceeds is GDP, then it must be running a a. Trade balance surplus Trade balance deficit c. Trade balance target plan d. Trade balance product 20) Joe buys a car imported from Germany. This would show up in the nation’s C3) Current account is. Capital account c. Non-fiduciary account d. Budget account 21) income payments from abroad made to domestic entities are called a. Factor service imports (ti) Factor service exports c. Factor service unilateral transfers d. Capital account transactions 22) The name "Celtic Tiger” refers to a. lceland b. Greenland c, Norway G5) ireland 23) When output fluctuates, a economy cannot smooth consumption, but an one can @ Closed, open b. Open, closed c. Free, unfree d. Fair, unfair 24) if a country investments more than it saves, the difference will show up in its Current account b. Coincidental account c. Conglomerate account 01. Corporate account 25} A country which has a current account surplus is a a. Net borrower ® Net lender (2. Net debtor d. Net servicer 26) In recent years, the U.S.’ financial account has been in a. Deficit @Surpius c. Decline d. Denial 27) Since the 19805, the US. has Eb Enjoyed capital gains on its external wealth b. Suffered capital tosses on its external wealth c. Been trying to implement a fixed exchange rate regime d. Been accumulating gold in preparation to moving back to the gold standard 28) Countries with a current account must be net of assets Surplus; buyers b. Deficit; sellers ' ‘ c. Deficit; buyers d. Surplus; sellers 29) An alternative strategy to borrowing externally is to develop 3. Casual savings b. Consuming saving (c3 Counter savings (1. Precautionary savings 30} From an international trade point of view, one form of precautionary savings is Ca.) Foreign reserves b. Household reserves c. Government spending d. Business investments ...
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This note was uploaded on 09/22/2011 for the course ECONOMICS 6311 taught by Professor Segerson during the Spring '10 term at UConn.

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Homework 4 - ' a.) UCONN - INTERNATIONAL TRADE NAME: 7...

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