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1、1.Which of the following does not represent an automatic adjustment in balance-of-payments disequilibrium? Variations in:a.Domestic incomeb.Foreign pricesc.Domestic pricesd.Foreign par valuesANS:DPTS:12.The balance-of-payments adjustment mechanism developed during the 1700s by the English economist
2、David Hume is the:a.Income-adjustment mechanismb.Flexible-exchange-rate-adjustment mechanismc.Price-adjustment mechanismd.Rank-reserve-adjustment mechanismANS:CPTS:13.Which chain of events would promote payments equilibrium for a surplus nation, according to the price-adjustment mechanism?a.Increasi
3、ng money supply-increasing domestic prices-rising imports-falling exportsb.Increasing money supply-falling domestic prices-rising imports-falling exportsc.Decreasing money supply-increasing domestic prices-falling imports-rising exportsd.Decreasing money supply-decreasing domestic prices-falling imp
4、orts-rising exportsANS:APTS:14.Which chain of events would promote payments equilibrium for a deficit nation, according to the price-adjustment mechanism?a.Increasing money supply-increasing domestic prices-rising imports-falling exportsb.Increasing money supply-falling domestic prices-rising import
5、s-falling exportsc.Decreasing money supply-increasing domestic prices-falling imports-rising exportsd.Decreasing money supply-decreasing domestic prices-falling imports-rising exportsANS:DPTS:15.During the gold standard era, central bankers agreed to react positively to international gold flows so a
6、s to reinforce the automatic adjustment mechanism. Which of the following best represents the above statement?a.Income-adjustment mechanismb.Price-adjustment mechanismc.Rules of the gamed.Discretionary fiscal policyANS:CPTS:16.During the gold standard era, the rules of the game suggested that:a.Surp
7、lus countries should increase their money suppliesb.Deficit countries should increase their money suppliesc.Surplus and deficit countries should increase their money suppliesd.Surplus and deficit countries should decrease their money suppliesANS:APTS:17.Which of the following balance-of-payments adj
8、ustment mechanisms is most closely related to the quantity theory of money?a.Income-adjustment mechanismb.Price-adjustment mechanismc.Interest-rate-adjustment mechanismd.Output-adjustment mechanismANS:BPTS:18.Under the gold standard, a surplus nation facing a gold inflow and an increase in its money
9、 supply would also experience a:a.Rise in its interest rate and a short-term financial inflowb.Rise in its interest rate and a short-term financial outflowc.Fall in its interest rate and a short-term financial inflowd.Fall in its interest rate and a short-term financial outflowANS:DPTS:19.Under the
10、gold standard, a deficit nation facing a gold outflow and a decrease in its money supply would also experience a:a.Rise in its interest rate and a short-term financial inflowb.Rise in its interest rate and a short-term financial outflowc.Fall in its interest rate and a short-term financial inflowd.F
11、all in its interest rate and a short-term financial outflowANS:APTS:110.Assume that Canada initially faces payments equilibrium in its merchandise trade account as well as in its capital and financial account. Now suppose that Canadian interest rates increase to levels higher than those abroad. For
12、Canada, this tends to promote:a.Net financial inflowsb.Net financial outflowsc.Net merchandise exportsd.Net merchandise importsANS:APTS:111.Assume that Canada initially faces payments equilibrium in its merchandise trade account as well as in its capital and financial account. Now suppose that Canad
13、ian interest rates fall to levels below those abroad. For Canada, this tends to promote:a.Net financial inflowsb.Net financial outflowsc.Net merchandise exportsd.Net merchandise importsANS:BPTS:112.Suppose the United States levies an interest equalization tax, which taxes Americans on dividend and i
14、nterest income from foreign securities. Such a tax would be intended to:a.Encourage financial movements from the United States to overseasb.Discourage financial movements from the United States to overseasc.Discourage financial movements from overseas to the United Statesd.None of the aboveANS:BPTS:
15、113.Assume that interest rates on comparable securities are identical in the United States and foreign countries. Now suppose that investors anticipate that in the future the U.S. dollar will appreciate against foreign currencies. Investment funds would thus be expected to:a.Flow from the United Sta
16、tes to foreign countriesb.Flow from foreign countries to the United Statesc.Remain totally in foreign countriesd.Not be affected by the expected dollar appreciationANS:BPTS:114.Suppose Japan increases its imports from Sweden, leading to a rise in Swedens exports and income level. With a higher incom
17、e level, Sweden imports more goods from Japan. Thus a change in imports in Japan results in a feedback effect on its exports. This process is best referred to as the:a.Monetary approach to balance-of-payments adjustmentb.Discretionary income adjustment processc.Foreign repercussion effectd.Price-spe
18、cie flow mechanismANS:CPTS:1Exhibit 13.1Assume the marginal propensity to consume for U.S. households equals 0.9, and the marginal propensity to import for the United States equals 0.1. Suppose there occurs an increase in investment of $10 billion at each level of income.15.Refer to Exhibit 13.1. Th
19、e value of the multiplier for the United States equals:a.2b.3c.4d.5ANS:DPTS:116.Refer to Exhibit 13.1. The change in the level of U.S. income resulting from the additional investment spending equalsa.$20 billionb.$30 billionc.$40 billiond.$50 billionANS:DPTS:117.Refer to Exhibit 13.1. The change in
20、the level of U.S. imports resulting from the rise in U.S. income equals:a.$5 billionb.$10 billionc.$15 billiond.$20 billionANS:APTS:118.The monetary approach to balance-of-payments adjustments suggests that all payments deficits are the result of:a.Too high interest rates in the home countryb.Too lo
21、w interest rates in the home countryc.Excess money supply over money demand in the home countryd.Excess money demand over money supply in the home countryANS:CPTS:119.The monetary approach to balance-of-payments adjustments suggests that all payments surpluses are the result of:a.Too high interest r
22、ates in the home countryb.Too low interest rates in the home countryc.Excess money supply over money demand in the home countryd.Excess money demand over money supply in the home countryANS:DPTS:120.Starting from a position where the nations money demand equals the money supply, and its balance of p
23、ayments is in equilibrium, economic theory suggests that the nations balance of payments would move into a deficit position if there occurred in the nation a:a.Decrease in the money supplyb.Increase in the money demandc.Decrease in the money demandd.None of the aboveANS:CPTS:121.Which approach to ba
24、lance-of-payments adjustment suggests that balance-of-payments surpluses are the result of excess money demand in the home country?a.Absorption approachb.Elasticities approachc.Monetary approachd.Purchasing-power-parity approachANS:CPTS:122.According to the rules of the game of the gold standard era
25、, a countrys central bank agreed to react to international gold flows so as to:a.Officially devalue a currency during eras of payments surplusesb.Officially revalue a currency during eras of payments deficitsc.Offset the automatic-adjustment mechanism (e.g., prices)d.Reinforce the automatic-adjustme
26、nt mechanismANS:DPTS:123.According to the quantity theory of money, a change in the domestic money supply will bring about:a.Inverse and proportionate changes in the price levelb.Inverse and less-than-proportionate changes in the price levelc.Direct and proportionate changes in the price leveld.Dire
27、ct and less-than-proportionate changes in the price levelANS:CPTS:124.The formulation of the so-called income adjustment mechanism is associated with:a.Adam Smithb.David Ricardoc.David Humed.John Maynard KeynesANS:DPTS:125.The value of the foreign trade multiplier equals the reciprocal of the sum of
28、 the marginal propensities to:a.Save plus importb.Import plus investc.Consume plus exportd.Save plus importANS:APTS:126.Starting from a position where the nations money demand equals the money supply and its balance of payments is in equilibrium, economic theory suggests that the nations balance of
29、payments would move into a deficit position if there occurred in the nation:a.An increase in the money supplyb.A decrease in the money supplyc.An increase in money demandd.None of the aboveANS:APTS:127.Starting from a position where the nations money demand equals the money supply and its balance of
30、 payments is in equilibrium, economic theory suggests that the nations balance of payments would move into a surplus position if there occurred in the nation:a.A decrease in the money supplyb.An increase in the money supplyc.A decrease in the money demandd.None of the aboveANS:APTS:128.Starting from
31、 a position where the nations money demand equals the money supply and its balance of payments is in equilibrium, economic theory suggests that the nations balance of payments would move into a surplus position if there occurred in the nation:a.An increase in the money demandb.A decrease in the mone
32、y demandc.An increase in the money supplyd.None of the aboveANS:APTS:129.Assume identical interest rates on comparable securities in the United States and foreign countries. Suppose investors anticipate that in the future the U.S. dollar will depreciate against foreign currencies. Investment funds w
33、ould tend to:a.Flow from the United States to foreign countriesb.Flow from foreign countries to the United Statesc.Remain totally in foreign countriesd.Remain totally in the United StatesANS:APTS:130.Suppose that rising U.S. income leads to higher sales and profits in the United States. This would l
34、ikely result in:a.Increasing portfolio investment into the United Statesb.Decreasing portfolio investment into the United Statesc.Increasing direct investment into the United Statesd.Decreasing direct investment into the United StatesANS:CPTS:1Figure 13.1. U.S. Capital and Financial Account31.Refer
35、to Figure 13.1. Upward movements along U.S. capital and financial account schedule CA0 would be caused by:a.U.S. interest rates rising relative to foreign interest ratesb.U.S. interest rates falling relative to foreign interest ratesc.Taxes placed on income earned by U.S. residents from their foreig
36、n investmentsd.Taxes placed on income earned by foreign residents from their U.S. investmentsANS:APTS:132.Refer to Figure 13.1. Downward movements along U.S. capital and financial account schedule CA0 would be caused by:a.U.S. interest rates rising relative to foreign interest ratesb.U.S. interest r
37、ates falling relative to foreign interest ratesc.Taxes placed on income earned by U.S. residents from their foreign investmentsd.Taxes placed on income earned by foreign residents from their U.S. investmentsANS:BPTS:133.Refer to Figure 13.1. The U.S. capital and financial account schedule would shif
38、t upward from CA0 to CA1 if:a.U.S. interest rates exceeded foreign interest ratesb.Foreign interest rates exceeded U.S. interest ratesc.Taxes were placed on income earned by U.S. residents from their foreign investmentsd.Taxes were placed on income earned by foreign residents from their U.S. investm
39、entsANS:CPTS:134.Refer to Figure 13.1. The U.S. capital and financial account schedule would shift upward from CA0 to CA1 if:a.U.S. residents receive subsidies to invest in foreign nationsb.U.S. interest rates rise relative to foreign interest ratesc.Taxes are reduced on income earned by U.S. reside
40、nts from their foreign investmentsd.Expected profits decline on U.S. investments in foreign manufacturingANS:DPTS:135.Refer to Figure 13.1. The U.S. capital and financial account schedule would shift upward from CA0 to CA1 for all of the following reasons except:a.U.S. political stability improves r
41、elative to foreign political stabilityb.U.S. interest rates fall relative to foreign interest ratesc.Taxes are placed on income earned by U.S. residents from foreign investmentsd.Restrictions are imposed on foreign loans granted by U.S. banksANS:BPTS:136.Refer to Figure 13.1. U.S. capital and financ
42、ial account schedule CA0 would shift upwards, or downwards, for all of the following reasons except:a.U.S. residents being taxed on income earned from foreign investmentsb.U.S. banks being restricted on loans that can be made abroadc.U.S. political stability changing relative to foreign political st
43、abilityd.U.S. interest rates changing relative to foreign interest ratesANS:DPTS:1Table 13.1. Canadas Saving, Investment, Import, and Export Functions (in billions of dollars) Under a System of Fixed Exchange RatesExport FunctionX = 3000Investment FunctionI = 1000Saving FunctionS = -1000 + 0.2YImpor
44、t FunctionM = 500 + 0.25Y37.Referring to Table 13.1, if Canadas income rises by $200 billion, saving would rise by:a.$10 billionb.$20 billionc.$30 billiond.$40 billionANS:DPTS:138.Referring to Table 13.1, if Canadas income rises by $200 billion, imports would rise by:a.$50 billionb.$75 billionc.$100
45、 billiond.$125 billionANS:APTS:139.Referring to Table 13.1, Canadas foreign trade multiplier equals:a.1.75b.2.05c.2.22d.2.64ANS:CPTS:140.Referring to Table 13.1, Canadas equilibrium level of income is:a.$8000 billionb.$9000 billionc.$10,000 billiond.$11,000 billionANS:CPTS:141.Refer to Table 13.1. If improved business optimism leads to increases in Canadas planned investment spending from $1000 billion to $1200 billion, Can