Econ%20252%20Exam%202%20-%20PINK%20-%20Fall%202009

Econ%20252%20Exam%202%20-%20PINK%20-%20Fall%202009 - 1....

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1. Suppose that more British decide to vacation in the U.S. and that the British purchase more U.S. Treasury bonds. Ignoring how payments are made for these purchases, a. the first action by itself raises U.S. net exports, the second action by itself raises U.S. net capital outflow. b. the first action by itself raises U.S. net exports, the second action by itself lowers U.S. net capital outflow. c. the first action by itself lowers U.S. net exports, the second action by itself raises U.S. net capital outflow. d. the first action by itself lowers U.S. net exports, the second action by itself lowers U.S. net capital outflow. 2. In Ireland, a pint of beer costs 2.2 Irish pounds. In Australia, a pint of beer costs 4 Australian dollars. If the exchange rate is .5 pounds per Australian dollar, what is the real exchange rate? a. 0.91 pints of Irish beer per pint of Australian beer b. 1.1 pint of Irish beer per pint of Australian beer c. 3.64 pints of Irish beer per pint of Australian beer d. 4.4 pints of Irish beer per pint of Australian beer 3. Suppose that in a country people lose confidence in the banking system and hold relatively more currency and less deposits. As a result, bank reserves will a. decrease and the money supply will eventually decrease. b. decrease and the money supply will eventually increase. c. increase and the money supply will eventually decrease. d. increase and the money supply will eventually increase. 4. A country has a trade deficit. Its a. net capital outflow must be positive, and saving is larger than investment. b. net capital outflow must be positive and saving is smaller than investment. c. net capital outflow must be negative and saving is larger than investment. d. net capital outflow must be negative and saving is smaller than investment. 5. A U.S. firm buys cement mixers from China and pays for them with U.S. dollars. a. The purchase of the cement mixers increases U.S. net exports and the payment with dollars increases U.S. net capital outflow. b. The purchase of cement mixers increases U.S. net exports and the payment with dollars decreases U.S. net capital outflow. c. The purchase of cement mixers decreases U.S. net exports and the payment with dollars increases U.S. net capital outflow. d. The purchase of cement mixers decreases U.S. net exports and the payment with dollars decreases U.S. net capital outflow. 6. Other things the same, if the U.S. real exchange rate appreciates, 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. Pink Version Page 1 of 6 Exam II
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7. Economists would predict that, other things the same, the more generous unemployment compensation a country has, a. the shorter the duration of each spell of unemployment, and the higher the unemployment rate. b.
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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%20Exam%202%20-%20PINK%20-%20Fall%202009 - 1....

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