第八章-练习题

第八章1. The assumptions of the traditional approaches to exchange rate and balance ofpayments determination reflect the fact that:A. they were developed during the time of the gold standard and the early BrettonWoods systems.B. economists had not yet recognized the importance of monetary factors at thetime they were developed.C. there were sizable capital flows between industrialized countries at the timethey were developed.D. the Keynesian school of thought had not permeated international theory at thetime they were developed.Answer: A2. The size of trade flows relative to capital flows is:A. considerably larger.B. roughly equal due to trade balances effects.C. exactly equal due to double entry accounting.D. quite minuscule.Answer: D3. The traditional approaches to exchange rate and balance of paymentsdetermination assume that capital flows occur:A. at the time of transactions.B. only as a means of financing current account transactions.C. largely between countries of equal size and wealth.D. in relatively unpredictable waves determined by the animal spirits of investors.Answer: B4. The elasticity of the export supply in turn determines the elasticity of the:A. demand for foreign exchange.B. supply of foreign exchange.C. demand for domestic currency.D. supply of domestic currency.Answer: A5. The more elastic is the export supply curve, the:A. less elastic is the demand for domestic currency.B. more elastic is the supply of domestic currency.C. less elastic is the supply of foreign exchange.D. more elastic is the demand for foreign exchange.Answer: D6. The import demand curve determines the _____in the same way that the exportsupply curve determines the ______.A. supply of domestic currency; demand for domestic currency.B. demand for domestic currency; supply of domestic currency.C. supply of foreign exchange; demand for foreign exchange.D. demand for foreign exchange; supply of foreign exchange.Answer: C7. The more elastic is the import demand curve, the:A. more elastic is the foreign exchange demand curve.B. less elastic is the foreign exchange demand curve.C. more elastic is the foreign exchange supply curve.D. less elastic is the foreign exchange supply curve.Answer: C8. The elasticities approach emphasizes the effects of changes in _______ indetermining the of balance of payments and the exchange rate.A. the quantities of goods.B. the relative supply of moneyC. the prices of goodsD. real incomeAnswer: C9. According to the elasticities approach, the elasticities of the import demand andexport supply curves determine how much the quantity of imports demanded and the quantity of exports supplied will change in response to:A. a shift in consumer tastes.B. a change in the exchange rate.C. trade restrictions placed on imports and exports.D. the business cycle.Answer: B10. The Marshall-Lerner condition specifies:A. a necessary condition for exchange rate stability.B. a sufficient condition for exchange rate instability.C. when a central bank should intervene in foreign exchange markets.D. the guidelines set forth in GATT.Answer: A11. The Marshall-Lerner condition holds when the:A. sum of the elasticities of import demand and export supply exceed one.B. difference in the elasticites of import demand and export supply exceed one.C. difference in the absolute values of the elasticites of import demand and exportsupply exceed one.D. sum of the absolute values of the elasticities of import demand and exportssupply exceed one.Answer: D12. The reason one expects supply and demand to be more price elastic over longertime periods is because:A. goods with longer shelf life have higher elasticities.B. there are feedback affects which alter the initial response.C. time is needed for households and businesses to adjust to price changes.D. the elasticity of supply always exceeds that of demand.Answer: C13. A phenomenon in which a depreciation of the domestic currency causes a nation'sbalance of payments to worsen before it improves is called:A. the J-curve effect.B. the S-curve effect.C. devaluation.D. pass-through effects.Answer: A14. The basic assumption underlying the J-curve effect is that:A. people are myopic in their views of how the exchange rate will evolve over time.B. initially, supply will exceed demand but in equilibrium the two will be equated.C. supply and demand are less elastic in the short run than in the long run.D. an overshooting effect occurs as people change their investment horizons.Answer: C15. The idea that a country's trade balance may first deteriorate after a currencydevaluation and only later improve is known as:A. the relative price effect.B. the elasticity effect.C. the pass through affect.D. the J-Curve.Answer: D16. The effect of a currency depreciation that results in higher domestic prices ofimported goods and services is known as:A. the pass-out effect.B. the pass-through effect.C. cost-push inflation.D. demand-pull inflation.Answer: B17. One explanation for why a full pass-through to domestic prices is not alwaysobserved is that:A. the exchange rate is fixed.B. the exchange rate is floated yet managed.C. domestic firms respond with temporary price changes in order to maintainmarket shares.D. foreign firms view the change in the exchange rate as temporary and alter theirprices accordingly.Answer: D18. The absorption approach to exchange rate and balance of payments determinationis based on:A. the relative prevalence of traded goods in an economy.B. demographic trends which alter the demand for imports.C. how much of GDP is consumed by government.D. the difference between real income and absorption levels.Answer: D19. Which of the following is not included in a nation's expenditures?A. Consumption.B. Investment.C. Government spending.D. Exports.Answer: D20. Domestic absorption includes expenditures on final goods and services in whichfour basic categories?A. Consumption, investment, government, and exports.B. Consumption, investment, exports, and imports.C. Consumption, investment, government, and imports.D. Investment, government, exports, and imports.Answer: C21. The current account is defined as the:A. sum of exports and imports.B. product of exports and imports.C. ratio of imports to exportsD. difference between exports and imports.Answer: D22. A nation is running a current account deficit if:A. imports are less than exports and real income is less than absorption.B. imports are less than exports and absorption is less than real income.C. exports are less than imports and real income is less than absorption.D. exports are less than imports and absorption is less than real income.Answer: C23. The difference between real income and absorption is equal to theA. current account.B. public budget deficit.C. exchange-rate.D. net national product.Answer: A24. Devaluation of the domestic currency will induceA. expenditure switching.B. a flow of capital out of the country.C. a revaluation once the trade balance has stabilized.D. accompanying trade restrictions.Answer: A25. The portfolio approach is believed to have been developed initially byA. Stanley Fischer.B. Sidney Alexander.C. Milton Friedman.D. Robert Lucas.Answer: B26. In the absorption approach, under adjustable-pegged exchange rates,policymakers have access to which two policy instruments?A. Taxes and government spending.B. Federal funds rate and the discount rate.C. Trade restrictions and foreign exchange intervention.D. Absorption and expenditures-switching.Answer: D。