Econ%20252%20BLUE%20Final%20-%20Fall%202009

Econ%20252%20BLUE%20Final%20-%20Fall%202009 - 1. Under the...

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1. Under the assumptions of the Fisher effect and monetary neutrality, if the money supply growth rate rises, then a) both the nominal and the real interest rate rise. b) neither the nominal nor the real interest rate rise. c) the nominal interest rate rises, but the real interest rate does not. d) the real interest rate rises, but the nominal interest rate does not. 2. Wealth is redistributed from debtors to creditors when inflation is a) high, whether it is expected or not. b) low, whether it is expected or not. c) unexpectedly high. d) unexpectedly low. 3. In a fractional-reserve banking system, a decrease in reserve requirements a) increases both the money multiplier and the money supply. b) decreases both the money multiplier and the money supply. c) increases the money multiplier, but decreases the money supply. d) decreases the money multiplier, but increases the money supply. 4. Other things the same, if the U.S. real exchange rate depreciates, U.S. net exports a) increase and U.S. net capital outflow decreases. b) decrease and U.S. net capital outflow increases. c) and U.S. net capital outflow both increase. d) and U.S. net capital outflow both decrease. 5. Suppose that more Chinese decide to vacation in the U.S. and that the Chinese purchase more U.S. Treasury bonds. Ignoring how payments are made for these purchases, the first action _______ U.S. net exports, the second action _________ U.S. net capital outflow. a) raises; raises b) raises; lowers c) lowers; raises d) lowers; lowers 6. A tariff imposed on imports, in the long run, will cause a) a real appreciation of the home currency and a decrease in net exports. b) a real depreciation of the home currency and an increase in net exports. c) a real appreciation of the home currency but leave net exports unchanged. d) a real depreciation of the home currency but leave net exports unchanged. 7. A real depreciation of the dollar can be explained by a) an increase in saving by U.S. households. b) an increase in perceived risk of U.S. assets relative to foreign assets. c) a decrease in the government budget deficit. d) All of the above. e) None of the above. 8. In the United States, a three-pound can of coffee costs about $5. Suppose the exchange rate is about 0.8 euros per dollar and that a three-pound can of coffee in Belgium costs about 3 euros. What is the real exchange rate? a) 5/3 cans of Belgian coffee per can of U.S. coffee b) 4/3 cans of Belgian coffee per can of U.S. coffee c) 3/4 cans of Belgian coffee per can of U.S. coffee d) 3/5 cans of Belgian coffee per can of U.S. coffee Econ 252 BLUE Final 1 of 5 Fall 2009
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9. In the short run , following an open market purchase of securities by the Fed, interest rates will ______ and investment will _______. a) rise; rise
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This note was uploaded on 02/06/2012 for the course ECON 252 taught by Professor Robertholand during the Fall '08 term at Purdue.

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Econ%20252%20BLUE%20Final%20-%20Fall%202009 - 1. Under the...

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