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BUS 313 - Chapter 11: Quiz

Terms in this set (6)

When the U.S. dollar​ depreciates, it is predicted that

A. the U.S. current account will worsen in the short run​ (become more​ negative), and improve in the long run.
B. the relative price of U.S. imports will decrease.
C. U.S. firms and individuals will immediately change from foreign sources of import to domestic sources of products.
D. the U.S. current will improve a little bit in the short run​ (become more​ positive), and improve substantially in the long run.
A. the U.S. current account will worsen in the short run​ (become more​ negative), and improve in the long run.
The figure on the right shows aggregate money​ demand, Md, and the initial money​ supply, Ms1.
​
Now, suppose the money supply rises while the price level and all other variables not in the graph remain the same.
Use the line drawing tool to draw the new money supply on the same graph and label it ​'Ms2​'.

As the result of this change in the money​ supply, the equilibrium ____ will _____.
the line shifts to the right
interest rate, fall
Which of the following​ is/are examples of expansionary fiscal​ policy?

A. An increase in money supply by the federal reserve.
B. An increase in government spending.
C. An increase in taxes.
D. All of the above.
E. None of the above.
B. An increase in government spending.
Assume Japan begins with its economy running at full employment. If the Japanese government increases government expenditures the​ AS/AD model shows that in the short​ run,

A. the AS curve will shift​ out, causing an increase in Japanese output and in the Japanese price level.
B. the AD curve will shift​ out, causing an increase in the Japanese price​ level, but not change in output.
C. the AS curve will shift​ out, causing an increase in the Japanese price​ level, but not change in output.
D. the AD curve will shift​ out, causing an increase in Japanese output and in the Japanese price level.
B. the AD curve will shift​ out, causing an increase in the Japanese price​ level, but not change in output.
If a country implements an contractionary monetary​ policy, the short to medium term effects include

A. an increase in the​ country's interest rate and a depreciation of the​ country's currency.
B. a decrease in the​ country's interest rate and an appreciation of the​ country's currency.
C. a decrease in the​ country's interest rate and a depreciation of the​ country's currency.
D. an increase in the​ country's interest rate and an appreciation of the​ country's currency.
D. an increase in the​ country's interest rate and an appreciation of the​ country's currency.
A temporary decrease in an​ economy's money supply produces

A. no change in the​ long-run expected exchange​ rate, an appreciation of its​ currency, and a fall in its output and employment.
B. a decline in the​ long-run expected exchange​ rate, an appreciation of its​ currency, and a fall in its output and employment.
C. no change in the​ long-run expected exchange​ rate, a depreciation of its​ currency, and a fall in its output and employment.
D. an appreciation of its​ currency, but no change in either the​ long-run expected exchange rate or its output and employment.
A. no change in the​ long-run expected exchange​ rate, an appreciation of its​ currency, and a fall in its output and employment.
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