INSTURCTION
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1. The difference between net capital flows and the current account deficit is called the
2. The nominal exchange rate (E) represents
3. Which of the following, all else fixed, will cause the real exchange rate to decrease?
4. Suppose a country that has been pegging its currency is faced with a situation where financial market participants now expect some future devaluation. In such a situation, we would generally expect which of the following to occur?
5. Assuming that the US can produce 6 boats or 5 cars per unit of labour, and that Ghana can produce 5 boats or 3 cars per unit of labour, Ghana has
6. The original Phillips curve implied or assumed that
7. Which of the following will not cause an increase in the natural rate of unemployment?
8. Which of the following explains why the original Phillips curve relation disappeared or, as some economists have remarked, "broke down in the 1970s?
oi If you hear a person saying "I lost my job because I was replaced by a machine," you should conclude that this person is unemployed
10. If a country has a population of 400 million, 160 million people employed and 40 million people looking for work, then its unemployment rate is
11. Which of the following generally occurs when a central bank pursues expansionary monetary policy?
12. Which of the following is a component of high-powered money?
13. For this question, assume that individuals do not hold currency (i.e., c = 0). If the ratio of reserves to deposits is 0.10, the money multiplier
14. In the Phillips curve equation, which of the following will cause an increase in the current inflation rate?
15. When inflation has not been very persistent, we can expect that
16. Which of the following will cause an increase in the amount of money that one wishes to hold?
17. The money demand curve will shift to the right when one of the following occurs?
18. Which of the following is not included as a component of the M1 definition of money?
19. At the current interest rate, suppose the supply of money is less than the demand for money. Given this information, we know that the
20. The interest rate will increase as a result of which of the following events?
