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If inflation rises in both Russia and the US,
but it rises more in Russia,

this will cause the Russian rubble to: Depreciate and the U.S. dollar to appreciate

If there is a new invention in the United
Kingdom, that US manufactures all want to
buy,

the British pound will:
Appreciate and the U.S. dollar to depreciate

The United States stock market and real
estate market is booming with substantial
returns, higher than the Canadian markets. This
will cause the

Canadian dollar to:
Depreciate and the U.S. dollar to appreciate

If tariffs and quotas are put in place in most of the European Union, then compared to the American Dollar, this will cause

the Euro to: Appreciate and the U.S. dollar to depreciate

The amount of income people in Argentina
has begins to grow while American incomes fall.
The result will cause the Argentine peso to:

Depreciate and the U.S. dollar to appreciate

which is an item that would be found in the
current account?

Equipment ordered from overseas

Remittances of Mexican workers in the U.S. to their families in Mexico are included in:

Is not included in any account.

Which is an item in the capital or financial
accounts for the US?

US Bonds sold to the European Union

Which represents a debit in the current
account section of the U.S. balance of
payments?

U.S. tourists in Great Britain buy souvenirs (exports)

Which represents a credit (+) on the financial
account of the U.S. balance of payments?

A German firm buys assets from a US firm

When a Japanese company buys a U.S.
software company, this transaction will be a:

Credit on the financial account of the U.S.
balance of payments

When a U.S. importer buys 100,000 pairs of pants from a Hong Kong company, this transaction will be a:

Debit on the current account of the U.S.
balance of payments

When a U.S. agribusiness sells 10,000 units
of cow vaccine to a company in France, this
transaction will be a:

Credit on the current account of the U.S.balance
of payments

When a U.S. company purchases a factory !n
Singapore, this will be a:

Debit on the financial account of the U.S.
balance of payments

In the Balance of Payments statement, a.
current account surplus will be matched by a:

Capital and financial accounts deficit

GOP measures

The monetary value of all final goods and
services produced by an economy

G D P stands for:

Gross Domestic Product

Real G D P and nominal G D P differ because the
real GOP:

has been adjusted for changes in the price
level {inflation).

If inflation is growing faster than GOP, we can
conclude that:

nominal G D P is rising but real G D P is
declining.

If real interest rates rise in the United
Kingdom relative to the United States, then this
event is most likely to cause

the British pound to: Appreciate and the U.S. dollar to depreciate

If the population of a country is growing faster than
the GOP, we can conclude: {note: per capita income = purchasing power parity)

The per capita income of people in that country is going down.

If Japanese autos increase in popularity in the
United States, then this event is most likely to

cause the Japanese yen to: Appreciate and the U.S. dollar to depreciate

The GDP tends to:

overstate economic well being because it
counts all production equally as positive,
such as pollution

equation C +I+ G + Xn=

G D P

C is the GDP equation is:

Consumer

I is the GDP equation is:

Investment

G is the GDP equation is:

Government purchases

Xn is the GDP equation is:

Net Exports

The following are data for a hypothetical
economy in billions of dollars: I {$300}; imports {$30}; exports {$20); C {$2,000); and, G {$500}. What is GOP in this economy?

2790 Billion (Imports - Exports)

Which of the following would be in the C
sector:

Dental Services

Which of the following would be in the
C sector:

Landscaping services
A purchase of a new computer
Money spent on a new toy by a child

Which would be considered part of the I
sector:

The construction of a new factory

Which would be in the I sector:

The purchase of a delivery truck
The building of a residential home
Changes in inventory

Which would be considered part of the G
sector:

The building of an office building

Which of the following would be in the G sector:

a) Spending on public school supplies
b) Spending on a weapons system, made in the US, but will be used the US forces overseas
c) Purchases made by local governments

Which describes how the Xn sector is
computed:

Exports minus Imports

Which would be a positive addition to the
Xn sector:

A Sony television made in the US and
sold in Japan

Which would be a negative addition to the
Xn sector:

A General Motors car made in Canada and
sold in the US

Which is following might cause demand-pull
inflation?

And increase in demand at full employment

Which is the following might cause cost push
inflation?

A sharp increase in the price of a resource

If Switzerland has a much lower inflation rate
than the United States, then this event is most
likely to cause the

Swiss franc to: Appreciate and the U.S. dollar to depreciate

Which of the following might cause a
recession?

A decrease in labor productivity

Which of the following might cause a
recession?

An unexpected decline in productivity

Why would the government enact an
expansionary fiscal policy?

To combat a recession

Why would government enact
contractionary fiscal policy?

To combat demand pull inflation

If currency speculators decide to buy up
South Korean currency, then this event is most
likely to cause the

South Korean won to: Appreciate and the U.S. dollar to depreciate

What is the main mechanism of
monetary policy?

Manipulation of the money supply

Which of the following is an example of
expansionary fiscal policy?

Congress passes a large transportation
bill to build new highways

Which of the following is an example of
expansionary fiscal policy?

Congress lowers income tax rates

Which of the following is an example of
contractionarv fiscal policy?

Congress reduces money spent on a
wide variety of Federal programs

Which of the following is an example of
contractionarv fiscal policy?

Sales taxes are increased

Which of the following is an example of
expansionary monetary policy?

The Federal Reserve lowers the discount
rate

Which of the following is an example of
expansionary monetary policy?

The Federal Reserve lowers the reserve
ratio

Which of the following is an example of
restrictive monetary policy?

The Federal Reserve sells bonds

Which of the following is an example of
restrictive monetary policy?

The Federal Reserve increases the discount
rate

One problem with fiscal policy is:

It has several lag times, that reduce its
effectiveness

One problem with monetary policy is:

seems better at slowing inflation than
pushing the economy out of recession

Frictional unemployment represents:

Those that are in between jobs

Cyclical unemployment is:

People who lost their jobs due to a recession

Full employment is:

Also called the natural rate of unemployment.

The aggregate supply curve for the
immediate short run is?

horizontal

The aggregate supply curve over the long
run is?

vertical

Graph showing the aggregate demand Curve crossing the normal (not immediate) aggregate short run supply curve. AD1

Recession

Graph showing the aggregate demand Curve crossing the normal (not immediate) aggregate short run supply curve. AD2

Expansion

Graph showing the aggregate demand Curve crossing the normal (not immediate) aggregate short run supply curve. AD3

Inflation

the four phases of the business cycle on the graph below: A

Peak

the four phases of the business cycle on the graph below: B

Expansion

the four phases of the business cycle on the graph below: C

Recession

the four phases of the business cycle on the graph below: D

Trough

Explanation economists have for the business cycle occurring

Fluctuations are driven by shocks. The economy is forced to respond to chocks through changes in output and employment rather that through changes in prices.

Which of the following are included in the labor force:

A 17 year old in high school
A part time worker
A person who is seeking work

People who are unemployed because of a change in the type of skills, or downturn in economics of the area they live, are part-of ____ unemployment

Structural

Unemployment,due to a recession and where people are expected to be rehired when the economy improves is _____ unemployment.

Cyclical

When workers are just "between jobs", it is called ____ unemployment.

Frictional

What are some problems with the current method of figuring the unemployment rate (circle two)

It doesn't count discouraged people who have given up seeking work.
Involuntary part time works are counted the same as full time workers.

The natural rate of unemployment is (circle three):

The full employment level of unemployment
Can vary over time, and between countries
Is mostly made up of frictional unemployment

Inflation is:

Represented by the Consumer price Index
Results in the devaluation of currency
An increase in the price level

Cost push Inflation is

A sharp increase in resource and production costs

Growth is

An increase in productivity

Recession is

Declining productivity for two consecutive quarters.

Demand-pull inflation

Too much spending chasing too few goods.

Who/Which of the following are hurt by unanticipated inflation?

Fixed income receivers
People with long term bonds purchased last year.
Consumers considering whether to make major purchases.

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