Pre-Final%20Practice - Practice Test - Post Exam II Topics...

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Practice Test - Post Exam II Topics Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Other things the same, if the interest rate falls, then a. firms will want to borrow more, which increases the quantity of loanable funds demanded. b. firms will want to borrow less, which decreases the quantity of loanable funds demanded. c. firms will want to borrow more, which increase the quantity of loanable funds supplied. d. firms will want to borrow less, which decreases the quantity of loanable funds supplied. Figure 32-1 ____ 2. Refer to Figure 32-1 . In the Figure shown, if the real interest rate is 2 percent, there will be a a. surplus of $20 billion. b. surplus of $40 billion. c. shortage of $20 billion. d. shortage of $40 billion. ____ 3. 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 U.S. goods Figure 32-2 ____ 4. Refer to Figure 32-2. If the real exchange rate is .6, then there is a a. surplus of 100 so the real exchange rate will fall. b. surplus of 100 so the real exchange rate will rise. c. shortage of 100 so the real exchange rate will fall. d. shortage of 100 so the real exchange rate will rise. ____ 5. The quantity of U.S. bonds foreigners want to buy is taken into account a. in the U.S. supply of loanable funds and the supply of dollars in the market for foreign- currency exchange. b. in the U.S. supply of loanable funds and the demand for dollars in the market for foreign- currency exchange. c. in the U.S. demand for loanable funds and the supply of dollars in the market for foreign- currency exchange. d. in the U.S. demand for loanable funds and the demand for dollars in the market for foreign-currency exchange. Figure 32-3 Refer to this diagram to answer the questions below. ____ 6. Refer to Figure 32-3 . At an interest rate of 3 percent, the diagram indicates that a. there is a surplus in the market for foreign-currency exchange.
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b. national saving equals domestic investment. c. net capital outflow + domestic investment = national saving. d. in the market for foreign-currency exchange the quantity of dollars supplied equals the quantity of dollars demanded. ____ 7. Suppose that the U.S. imposes an import quota on lumber. The quota makes the real exchange rate of the U.S. dollar a. appreciate but does not change the real interest rate in the United States. b. appreciate and the real interest rate in the United States increase. c.
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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 University-West Lafayette.

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Pre-Final%20Practice - Practice Test - Post Exam II Topics...

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