Question 1

According to the theory of purchasing-power parity, what will happen to a country's nominal exchange rate if the country has relatively high inflation?

Accepted Answer

Purchasing-power parity implies that the...

Question 2

When an Australian exporter sells software to France and uses the proceeds to buy stock in a French company, Australian exports _____ and there is a capital _____ to/from Australia.

Accepted Answer

A)  increase; outflow
B)  increase; inflow
C)  do not change; outflow
D)  decrease; outflowE) B) and D)
F) All of the above

Question 3

Increased foreign investment has trickle down effects, such as local job creation.Additionally it may result in outflows of dividends and interest payments.

Accepted Answer

A) True 
 B)False

Question 4

A country's balance on merchandise trade equals:

Accepted Answer

A)  the value of tariffs less the number of quotas
B)  the number of quotas less the value of tariffs
C)  the value of exports minus the value of imports
D)  the value of imports minus the value of exportsE) None of the above
F) B) and C)

Question 5

When the Big Mac in Egypt cost $US2.28, which is less than it does in converted US dollars, we can say it _____.

Accepted Answer

A)  should not be measured
B)  is difficult to ascertain, as the currency is volatile
C)  is undervalued
D)  is overvaluedE) A) and D)
F) All of the above

Question 6

Which of the following items may demonstrate limitations of the purchasing-power parity?

Accepted Answer

A)  when certain goods are not easily tradeable
B)  when goods are not perfect substitutes
C)  consumer preferences may change over time
D)  all of the above.E) B) and C)
F) C) and D)

Question 7

Balanced trade is:

Accepted Answer

A)  a situation in which the value of a country's exports equals the value of its production
B)  a situation in which the value of a country's exports equals the value of its imports
C)  a situation in which the value of a country's imports equals the value of its consumption
D)  none of the aboveE) A) and C)
F) None of the above

Question 8

The outcome from the GFEC has been that poorer nations have not received the capital investment required to continue their growth.

Accepted Answer

A) True 
 B)False

Exam 31: Open-Economy Macroeconomics: Basic Concepts

When an Australian exporter sells software to France and uses the proceeds to buy stock in a French company, Australian exports _ and there is a capital _ to/from Australia.

Correct Answer
verified

The outcome from the GFEC has been that poorer nations have not received the capital investment required to continue their growth.

Correct Answer
verified

Increased foreign investment has trickle down effects, such as local job creation.Additionally it may result in outflows of dividends and interest payments.

Correct Answer
verified

Balanced trade is:

Correct Answer
verified

According to the theory of purchasing-power parity, what will happen to a country's nominal exchange rate if the country has relatively high inflation?

Correct Answer
verified
Purchasing-power parity implies that the...
View Answer

When the Big Mac in Egypt cost $US₂.28, which is less than it does in converted US dollars, we can say it _____.

Correct Answer
verified

A country's balance on merchandise trade equals:

Correct Answer
verified

Which of the following items may demonstrate limitations of the purchasing-power parity?

Correct Answer
verified

Exam 31: Open-Economy Macroeconomics: Basic Concepts

When an Australian exporter sells software to France and uses the proceeds to buy stock in a French company, Australian exports _____ and there is a capital _____ to/from Australia.

Correct AnswerverifiedShow Answer

The outcome from the GFEC has been that poorer nations have not received the capital investment required to continue their growth.

Correct AnswerverifiedShow Answer

Increased foreign investment has trickle down effects, such as local job creation.Additionally it may result in outflows of dividends and interest payments.

Correct AnswerverifiedShow Answer

Balanced trade is:

Correct AnswerverifiedShow Answer

According to the theory of purchasing-power parity, what will happen to a country's nominal exchange rate if the country has relatively high inflation?

Correct AnswerverifiedPurchasing-power parity implies that the...View AnswerShow Answer

When the Big Mac in Egypt cost $US2.28, which is less than it does in converted US dollars, we can say it _____.

Correct AnswerverifiedShow Answer

A country's balance on merchandise trade equals:

Correct AnswerverifiedShow Answer

Which of the following items may demonstrate limitations of the purchasing-power parity?

Correct AnswerverifiedShow Answer

When an Australian exporter sells software to France and uses the proceeds to buy stock in a French company, Australian exports _ and there is a capital _ to/from Australia.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Purchasing-power parity implies that the...
View Answer

When the Big Mac in Egypt cost $US₂.28, which is less than it does in converted US dollars, we can say it _____.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified