Study guide 4

Study guide 4 - Study guide 4 ECON 2200-6 ch...

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Study guide 4 ECON 2200-6 ch 32.24.35.10.11.9.12.20 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Other things the same, an increase in the U.S. interest rate causes the quantity of loanable funds supplied to a. rise because net capital outflow and domestic investment rise. b. rise because national saving rises. c. fall because net capital outflow and domestic investment rise. d. fall because national saving falls. ____ 2. Other things the same, as the real interest rate rises a. domestic investment and net capital outflow both rise. b. domestic investment and net capital outflow both fall. c. domestic investment rises and net capital outflow falls. d. domestic investment falls and net capital outflow rises. ____ 3. If the supply of loanable funds shifts left, then a. the real interest rate and the equilibrium quantity of loanable funds both fall. b. the real interest rate falls and the equilibrium quantity of loanable funds rises. c. the real interest rate and the equilibrium quantity of loanable funds both rise. d. the real interest rate rises and the equilibrium quantity of loanable funds falls. ____ 4. Which of the following is included in the supply of U.S. dollars in the market for foreign-currency exchange in the open-economy macroeconomic model? a. A retail outlet in Canada wants to buy handbags from a U.S. manufacturer. b. A U.S. bank loans dollars to Karen, a U.S. resident, who wants to purchase a car in the U.S. c. A U.S. based law firm wants to build a new office in Japan. d. All of the above are correct. ____ 5. At a given real exchange rate, which of the following, by itself, would increase the supply of dollars in the market for foreign-currency exchange? a. foreign citizens want to buy more U.S. bonds b. U.S. citizens want to buy more foreign bonds c. foreign citizens want to buy more U.S. goods d. U.S. citizens want to buy more foreign goods ____ 6. The real exchange rate measures the a. price of domestic currency relative to foreign currency. b. price of domestic goods relative to the price of foreign goods. c. rate of domestic and foreign interest. d. None of the above is correct. ____ 7. Other things the same, if the U.S. real exchange rate depreciated, then U.S. net exports would a. fall and the quantity of dollars demanded in the market for foreign-currency exchange would fall. b. fall and the quantity of dollars demanded in the market for foreign-currency exchange would rise. c. rise and the quantity of dollars demanded in the market for foreign-currency exchange would fall. d. rise and the quantity of dollars demanded in the market for foreign-currency exchange would rise. ____ 8.
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This note was uploaded on 01/20/2012 for the course ECON 2200 taught by Professor Muratdoral during the Fall '09 term at Kennesaw.

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Study guide 4 - Study guide 4 ECON 2200-6 ch...

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