Question : 19.1   Macroeconomic Policy Goals in an Open Economy 1) A country : 1303657

 

19.1   Macroeconomic Policy Goals in an Open Economy

 

1) A country seeking to maintain internal balance would be concerned

A) only with attaining low levels of unemployment.

B) primarily with ensuring that saving is weighted more towards domestic investment than the current account.

C) with large fluctuations in output or prices.

D) with maintaining an adequate stock of gold reserves.

E) with stabilizing employment levels globally.

 

 

2) By internal balance, most economists mean

A) full employment.

B) price stability.

C) full employment and price stability.

D) full employment and moderate increase in prices.

E) full employment and high disposable income.

 

 

3) By external balance, most economists mean

A) avoiding excessive imbalances in international payments.

B) balance between exports and imports.

C) balance between the trade and service accounts.

D) what amounts to fixed exchange rates.

E) imbalance in internal transactions.

 

 

4) Which one of the following statements is TRUE?

A) Inflation but not deflation can occur even under conditions of full employment.

B) Deflation but not inflation can occur even under conditions of full employment.

C) Inflation or deflation can occur even under conditions of full employment.

D) Inflation can occur even under conditions of full employment only in the long run.

E) Inflation does not coincide with periods of high unemployment levels.

 

5) Inflation can occur under conditions of full employment

A) only if the central bank continues to inject money into the economy and the agents’ expectations of inflation are supported by the bank’s activities.

B) only if the central bank continues to inject money into the economy.

C) only if the central bank continues to withdraw money from the economy.

D) only if the central bank continues to inject money into the economy and all agents expect that inflation will not occur.

E) only if the central bank fails to inject money into the economy.

 

 

6) A sudden increase in the U.S. price level

A) makes those with dollar debts worse off.

B) makes those with dollar debts better off.

C) does not affect those with dollar debts.

D) makes those with foreign debts better off.

E) increases all dollar debts.

 

 

7) A sudden increase in the U.S. price level

A) makes creditors in dollars better off.

B) makes creditors in dollars worse off.

C) do not affect creditors in dollars.

D) makes creditors in DM worse off.

E) makes lenders worse off.

 

 

8) A sudden decrease in the U.S. price level

A) makes those with dollar debts worse off.

B) makes those with dollar debts better off.

C) do not affect those with dollar debts.

D) makes those with DM worse off.

E) makes creditors worse off.

 

 

9) A sudden decrease in the U.S. price level

A) makes creditors in dollars better off.

B) makes creditors in dollars worse off.

C) do not affect creditors in dollars.

D) makes creditors in DM better off.

E) makes those with dollar debts better off.

 

10) A current account surplus

A) poses a problem if domestic savings are being invested more profitably abroad than they would be at home.

B) may pose no problem if domestic savings are being invested more profitably abroad than they would be at home.

C) may pose no problem if domestic savings are being invested less profitably abroad than they would be at home.

D) there is no relation between current account surplus and between savings and investment.

E) poses a problem if domestic savings are being invested less profitably abroad than they would be at home.