Unformatted text preview: e U.S. dollar c. the Japanese yen will either appreciate, depreciate or remain constant against the U.S. dollar d. the Japanese yen will depreciate relative to the U.S. dollar 32. Lower tariffs and quotas cause a country's currency to ________ in the ________ run, everything else held constant. a. appreciate; long b. appreciate; short c. depreciate; long d. depreciate; short 33. If the U.S. dollar appreciates from 1.25 Swiss franc per U.S. dollar to 1.5 francs per dollar, then the franc depreciates from ________ U.S. dollars per franc to ________ U.S. dollars per franc. a. 0.80; 0.67 b. 0.33; 0.50 c. 0.67; 0.80 d. 0.50; 0.33 34. An increase in productivity in a country will cause its currency to ________ because it can produce goods at a ________ price, everything else constant. a. depreciate; lower b. appreciate; lower c. depreciate; higher d. appreciate; higher 35. The ________ states that exchange rate between any two currencies will adjust to reflect changes in the price levels of the two countries. a. theory of money neutrality b. quantity theory of money c. theory of purchasing power parity d. the law of one price 36. Suppose the Federal Reserve releases a policy statement today which leads people to believe that the Fed will be enacting expansionary monetary policy in the near future. Everything else held constant, the release of this statement would immediately cause the demand for U.S. assets to ________ and the U.S. dollar to ________. a. increase; appreciate b. decrease; appreciate c. increase; depreciate d. decrease; depreciate 37. Milton Friedman's proposition that inflation is always and everywhere a monetary phenomenon holds only if a. the unemployment rate does not rise continually. b. government budget deficits do not rise continually. c. the United States does not experience more than one negative supply shock per decade. d. the price level rises continually. 38. According to aggregate demand and supply analysis and with everything else held constant, a continuous increase in the money supply causes a. inflation. b. output to increase, but leaves the price level and inflation unchanged. c. the price level to increase, but has no lasting effect on the inflation rate. d. the price level to fall. 39. Financing government spending with tax...
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This note was uploaded on 04/25/2013 for the course ECON 2035 taught by Professor Stahl during the Spring '08 term at LSU.
- Spring '08
- The Land