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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? 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 4. A country has a trade deficit. Its 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.
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