ECON 214 Exam 4

Liberty ECON 214 Exam 4 Answers

  1. When supply shifts cause a downturn in the economy:
  2. If the Bank of Japan (the Japanese central bank) were to take steps to devalue the yen in foreign currency markets, the Japanese ____________ curve would shift rightward in the short run and the Japanese __________ curve would shift leftward in the long run.
  3. When demand for Canada’s exports falls:
  4. Which of the following goods/services is considered non-tradable?
  5. Use the following scenario to answer the questions that follow:
An economy has two workers, Smith and Ricardo. Every day they work, Smith can produce 4 computers or 16 smartphones, and Ricardo can produce 6 computers or 12 smartphones.
  6. Expectations:
  7. The following table shows the number of U.S. dollars required to buy one Mexican peso and the number of U.S. dollars required to buy one Japanese yen between January 1, 2013, and April 1, 2013. Use this table to answer the questions that follow:
  8. The combination of goods and services Mexico’s citizens might feasibly consume is called Mexico’s:
  9. Which of the following statements is true about monetary policy and the unemployment rate?
  10. Use the following scenario to answer the questions that follow:
Rosa and Dirk produce basketballs and footballs. Rosa can produce six basketballs per hour or two footballs per hour. Dirk can produce three basketballs per hour or four footballs per hour.
  11. The North American Free Trade Agreement (NAFTA) was intended to increase U.S. trade with which other countries?
  12. Which statement best describes the law of demand as it relates to currency markets?
  13. Expansionary monetary policy makes the aggregate demand curve:
  14. When the Fed buys bonds from financial institutions, new money moves directly:
  15. The figure below depicts the supply of U.S. dollars in the foreign currency exchange market.
  16. According to the Fisher equation, if a bank extends a loan for 3% and the inflation rate ends up being 5%:
  17. An import quota:
  18. Use the following scenario to answer the questions that follow:
An economy has two workers, Smith and Ricardo. Every day they work, Smith can produce 4 computers or 16 smartphones, and Ricardo can produce 6 computers or 12 smartphones.
  19. An individual or country that has a comparative advantage in the production of one good:
  20. In 2011, 60% of goods imported by the United States came from just seven nations. Which of the following nations was one of those seven?
  21. Expansionary monetary policy occurs when:
  22. Before the development of expectations theory:
  23. What will economists today likely state should have been done to limit the severity of the Great Depression?
  24. In the foreign currency market, the supply of a foreign currency is assumed to be _____________ because the central bank determines the supply of money.
  25. International trade and the associated increase in international competition has forced American businesses to:
  26. The following table shows the number of euros required to buy one U.S. Dollar between September 3, 2012, and April 1, 2013. Use this table to answer the questions that follow:
  27. Assume that a country currently has a trade deficit. If that country experiences a recession, what would we expect to happen to the trade deficit?
  28. Which of the following situations will arise in the domestic market following the removal of an import quota?
  29. Use the following scenario to answer the questions that follow:
Amy can produce either 5,000 pounds of cheese or 20 houses per year. Jim can produce either 5,000 pounds of cheese or 10 houses per year.
  30. Suppose an earthquake occurs in Dhaka, Bangladesh, and inflicts massive damages on the city. You raise money to send to aid the victims of the tragedy. How would this transaction be recorded?
  31. The arrows in Figures A–D represent possible movements of the exchange rate (euros per U.S. dollar) and the quantity of U.S. dollars buyers are willing and able to buy. Use these figures to answer the questions that follow:
  32. Refer to the following figure to answer the questions that follow. According to the figure, contractionary monetary policy will cause an economy that is initially at full- employment output to go from equilibrium __________ to equilibrium __________ in the short run.
  33. Which of the following would be entered into the U.S. capital account?
  34. Use the following graph to answer the questions that follow. If this is a trading (open) economy, quantity supplied of cars (in thousands) by the domestic producers will be:
  35. To avoid the negative effects of unexpected inflation, workers have an incentive to:
  36. The following table shows the number of various foreign currencies required to buy a U.S. dollar on April 12, 2008, and April 12, 2013. Use this table to answer the questions that follow. On April 12, 2008, a haircut in Japan cost 2,000 yen. Using the exchange rates in the above table, that haircut cost approximately ____________ U.S. dollars or ____________ Australian dollars.
  37. What does NAFTA stand for?
  38. Since the early 1980s, the Federal Reserve has moved toward which type of monetary policy?
  39. holds that people’s expectations of future inflation are based on their most recent experience.
  40. If the Bank of Japan (the Japanese central bank) were to take steps to devalue the yen in foreign currency markets, ____________, which would cause Japanese real gross domestic product (GDP) to increase in the short run.
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