国际金融练习

PAGEPAGE31. Theassumptionsofthetraditionalapproachestoexchangerateandbalanceofpaymentsdeterminationreflectthefactthat:theyweredevelopedduringthetimethegoldstandardandtheearlyBrettonTheelasticitiesapproachemphasizestheeffectsofchangesin indeterminingtheofbalanceofpaymentsandtheexchangerate. thepricesofgoodsAccordingtotheelasticitiesapproach,theelasticitiesoftheimportdemandandexportsupplycurvesdeterminehowmuchthequantityofimportsdemandedthequantityofexportssuppliedwillchangeinresponseto:achangeintheexchangerate.11. TheMarshall-Lernerconditionholdswhenthe:sumoftheabsolutevaluesoftheelasticitiesofimportdemandandexportssupplyexceedone.13. Aphenomenoninwhichadepreciationofthedomesticcurrencycausesnation'sbalanceofpaymentstoworsenbeforeitimprovesiscalled:theJ-curveeffect.Theabsorptionapproachtoexchangerateandbalanceofpaymentsisbasedon:. thedifferencebetweenrealincomeandabsorptionlevels.Whichofthefollowingisnotincludedinanation'sexpenditures?. Exports.Domesticabsorptionincludesexpendituresonfinalgoodsandservicesinfourbasiccategories?Consumption,investment,government,andimports.Anationisrunningacurrentaccountdeficitif:exportsarelessthanimportsandrealincomeislessthanabsorption.Thedifferencebetweenrealincomeandabsorptionisequaltocurrentaccount.Devaluationofthedomesticcurrencywillinduceexpenditureswitching.1. Whichofthefollowingisnottrueaboutanation's(simplified)monetarybase?C. Itisthesumofforeignexchangereservesandtotalbankreserves.6. ThemethodthattheFedoftenusesinordertooffsetaforeigninterventionis:B. anopen-markettransaction.Whenthedomesticpricelevelisequaltothespotexchangeratetimesthepricelevelthen:absolutepurchasingpowerparityholds.Underafixedexchangerate,theadditionalpurchaseofforeigngoodswillgenerateabalanceofpayments: deficitwithnochangeintheexchangeUnderaflexibleexchangerate,theadditionalpurchaseofforeigngoodsgenerate:D. adepreciationofthedomesticcurrencywithnochangeinthebalanceofpayments.Accordingtothemonetaryapproach,underafixedexchangerate,afalldomesticrealincomewillresultina:balanceofpaymentsdeficit.Accordingtothemonetaryapproach,underaflexibleexchangerateariseindomesticcreditwillresultin:adepreciationofthedomesticcurrency.Thesimplemodeloftheportfolioapproachassumeshouseholdschoosetotheirwealthin:money,domesticbonds,orforeignbonds.Theportfolioapproachpostulatesthat,underfloatingexchangerates,adeclinethedomesticinterestrateresultsin:adepreciationofthedomesticcurrency.25.Accordingtothemonetaryapproach,fullysterilizedforeigninterventionis:ineffective.27.Acentralbanksterilizesitsforeignexchangeinterventionsinorderto:preventitsforeignexchangeinterventionsfrominfluencingthemoneysupply.3. SupposethemeasureofrealGDPinagivenyearis$8billion. Ifweknowconsumptionspendingwas$5.5billion,governmentspendingwas$1.5 billion,exportswere$1billionandimportswere$1.2billion,whatwasthevalueofinvestmentspendinginthisyear?C. $1.2billion8.SupposethatthevalueoftheGDPdeflatoris2,realGDPis$100billion,andconsumptionspendingis$60billion.WhatisthevalueofnominalGDP?$200billion17.Whichofthefollowingrelationshipsisnotaresultofthecircularflowofincomeandexpenditure?Realnettaxesmustequalrealgovernmentexpenditure.24.Equilibriumrealincomeoccursatthepointswhere.totalrealaggregateexpendituresequaltherealvalueofdomesticallyproducedoutput.28.SupposeMPC=0.6,MPS=0.3andMPIM=0.1. A$1billionincreaseinautonomousexpenditurewouldleadtoa increaseinequilibriumincome. $2.5billionTheintersectionoftheISandLMschedulesdeterminestheequilibriumlevelsofthenominalinterestrateandaggregaterealincome.AnIS-LMequilibriumthatliesbelowtheBPschedulerepresentsabalance-of-paymentsdeficit.Capitalmobilityisameasureof.C. theeasewithwhichfinancialresourcescanflowacrossborders.CountrieswithrelativelylowcapitalmobilityhaveaBPschedulethatrelativelysteep.Acentralbankpolicyactionthatincreasesthenominalquantityofmoneya rightward shiftintheLMschedule.Afiscalcontractionleadstoa A. leftwardshiftintheISschedule.18.Considertheeffectofamonetaryexpansiononacountrywithafixedexchangerateandlowcapitalmobility.Whatwillbetheinitialchangeinthecountry'sexternalbalance?Thecurrentaccountwillmoveinthedirectionofalargerdeficit.21.Thefallininvestmentthatfollowsariseingovernmentspendingisknownasthecrowding-out effect.Tomaintainafixedexchangerate,acentralbankfacingabalance-of-paymentsdeficitshould sellforeignexchangereserves.Inasmallopeneconomywithperfectcapitalmobilityandafixedexchangeanexpansionarymonetarypolicy hasnoeffectonrealincome.Inasmallopeneconomywithperfectcapitalmobilityandafixedexchangerate,whichoneofthefollowingeventswillnotoccurasaresultofafiscalexpansion? Thecentralbank'seffortstomaintaintheexchangeratecompletelyoffseteffectsoffiscalpolicyonrealincome.Howdoesacurrencydepreciationaffectthecountry'sBPschedule?C. TheBPscheduleshiftstotheright.Underfloatingexchangerates,anexpansionarymonetarypolicyhasitseffectonrealincomemagnifiedbyasubsequentshiftintheISschedule.Underfloatingexchangeratesandhighcapitalmobility,theeffectsofaexpansiononrealincomeare.reducedbyashiftintheBPschedule.Underfloatingexchangeratesandlowcapitalmobility,theeffectsofaexpansiononrealincomeare magnifiedbyashiftintheBPschedule.7. Inasmallopeneconomywithperfectcapitalmobility,theeffectsofexpansionarymonetarypolicyonrealincomeareB. magnifiedbyresponsestosubsequentexchangeratemov