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Chris M., M.S.W. Social Work
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EXTENSIONS AND ISSUES; INTERNATIONAL ECONOMICS 1. A government

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EXTENSIONS AND ISSUES; INTERNATIONAL ECONOMICS
1. A government may be able to reduce the international value of its currency by

A. buying its currency in the foreign exchange market.

B. selling its currency in the foreign exchange market.

C. increasing its domestic interest rates.

D. selling foreign currencies in the foreign exchange market.


2. Suppose the domestic price (no-international-trade price) of wheat is $3.50 a bushel in the United States while the world price is $4.00 a bushel. Assuming no transportation costs, the United States will

A. export wheat.

B. neither export nor import wheat.

C. have a domestic shortage of wheat.

D. import wheat.


3. In terms of aggregate supply, a period in which nominal wages and other resource prices are unresponsive to price-level changes is called the

A. immediate market period.

B. long run.

C. short run.

D. very long run.


4. As distinct from reductions in the price level, reductions in the rate of inflation are referred to as

A. stagflation.

B. dollar depreciation.

C. deflation.

D. disinflation.


5. Which one of the following statements about the insider-outsider theory is correct?

A. In the insider-outsider theory, outsiders are foreigners.

B. In the insider-outsider theory, insiders are managers who have more information about their firms' performance than outsiders.
C. In the insider-outsider theory, insiders are workers who retain employment during recession.
D. In the insider-outsider theory, insiders are "principals" and outsiders are "agents."


6. Which one of the following statements is correct under the theory of supply-side economics?

A. Transfer payments increase incentives to work.

B. Increases in social security taxes and other business taxes shift the aggregate supply curve to the right.
C. High marginal tax rates severely discourage work, saving, and investment.

D. The Federal Reserve should adhere to a monetary rule that limits increases in the money supply to a 5 percent annual rate.


7. The international agency that lends money to developing countries for economic development projects is the

A. World Trade Organization (WTO).

B. International Monetary Fund (IMF).

C. World Bank.

D. World Credit Union.


8. Which one of the following is an example of direct foreign investment?

A. A U.S. government foreign aid grant to Bangladesh

B. A U.S. bank granting a loan to a Guatemalan firm

C. The purchase of debt issued by the Panamanian government

D. General Motors building an auto production facility in China


9. The mainstream view is that macro instability is caused by

A. government interference in the economy.

B. significant changes in investment spending.

C. erratic growth of the nation's money supply.

D. consumption "booms" and "busts."


10. An excise tax on an imported good that helps shield domestic producers of the good is called a

A. voluntary export restriction.

B. protective tariff.

C. import quota.

D. revenue tariff.


11. As it relates to international trade, dumping

A. is a form of price discrimination illegal under U.S. antitrust laws.

B. constitutes a general case for permanent tariffs.

C. is defined as selling more goods than allowed by an import quota.

D. is the practice of selling goods in a foreign market at less than cost.


12. When most consumers and firms reduce spending only because they expect other consumers and firms to reduce spending, and a recession results,

A. an adverse aggregate supply shock has occurred.

B. a self-correction has occurred.

C. a coordination failure has occurred.

D. a real-business-downturn has occurred.


13. Monetarists believe the private economy is inherently

A. unstable and the public sector should be small.

B. stable and that the government sector should be small.

C. stable, but that the public sector should be large.

D. unstable and the public sector should be large.


14. Which one of the following statements about the World Bank is correct?

A. The World Bank provides short-term loans to developing countries that are incurring balance of payments deficits.
B. The World Bank provides military assistance to those nations interested in improving national defense.
C. The World Bank makes and guarantees loans for basic development projects such as the construction of dams, roads, and schools.
D. The World Bank provides gold for developing countries that want to go on the gold standard.

15. The exchange rate system currently used by the industrially advanced nations is

A. the gold standard.

B. a fixed rate system.

C. the Bretton Woods system.

D. the managed float.


16. Which one of the following is an ex

Hello Yvonne,

 

It appears that your post got cut short. Could you post the remaining questions, starting with #16?

 

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Customer: replied 5 years ago.

16. Which one of the following does not correlate positively with economic growth?

A. Output per capita

B. The literacy rate

C. Life expectancy

D. The percentage of the population engaged in agriculture

 

17. As of the year 2006, which one of the following countries had the largest share of total world exports?

A. China

B. Germany

C. United States

D. Japan

 

18. The equation of exchange suggests that, if the supply and velocity of money remain unchanged, an increase in the physical volume of goods and services produced will cause

A. the unemployment rate to rise.

B. a decline in the price level.

C. the Federal Reserve Banks to sell securities in the open market.

D. an automatic budget deficit.

 

19. Which one of the following statements is correct under the theory of supply-side economics?

A. Transfer payments increase incentives to work.

B. Increases in social security taxes and other business taxes shift the aggregate supply curve to the right.

C. The Federal Reserve should adhere to a monetary rule that limits increases in the money supply to a 5 percent annual rate.

D. High marginal tax rates severely discourage work, saving, and investment.

 

20. In the U.S. balance of payments, U.S. purchases of assets abroad are a(n)

A. current account item.

B. U.S. dollar outflow.

C. U.S. dollar inflow.

D. inpayment.

 

Thank You
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