Site MapHelpFeedbackMultiple Choice Quiz
Multiple Choice Quiz
(See related pages)

1
An open economy is one that:
A)has a high level of inflation.
B)has a high level of economic growth.
C)engages in international trade.
D)all of the above.
2
Which of the following correctly describes the United States since 1950?
A)The American economy has become an increasingly open economy.
B)A growing share of output and consumption in the United States is related to international trade.
C)The United States has become the world's largest debtor nation.
D)All of the above.
3
A systematic statement of all economic payments between a country and the rest of the world is called that country's:
A)balance of international transactions.
B)trade balance.
C)foreign exchange rate.
D)financial account.
4
All of the purchases and sales of financial assets and liabilities will appear on a nation's:
A)balance of international transactions.
B)trade balance.
C)foreign exchange rate.
D)financial account.
5
All imports and exports of goods and services along with investment income and transfer payments will appear on a nation's:
A)balance of international transactions.
B)trade balance.
C)balance on current account.
D)financial account.
6
Which of the following is incorrect?
A)Services are no longer an important part of international trade for the United States.
B)The trade balance consists of all imports and exports.
C)The balance of international payments as a whole must by definition show a final zero balance.
D)None of the above.
7
The price of one currency in terms of another is called the:
A)purchasing-power-parity (PPP) theory of exchange rates.
B)trade balance.
C)foreign exchange rate.
D)financial account.
8
Depreciation and appreciation occur when the exchange rate is _______. Devaluation and revaluation occurs when the exchange rate is _______. Depreciation and Devaluation are both _______ in the value of the currency.
A)fixed; floating; decreases
B)fixed; floating; increases
C)floating; fixed; decreases
D)floating; fixed; increases
9
Which of the following states that a nation's exchange rate will tend to equalize the cost of buying traded goods at home with the cost of buying those goods abroad?
A)purchasing-power-parity (PPP) theory of exchange rates.
B)trade balance.
C)foreign exchange rate.
D)financial account.
10
The important difference between the gold standard and the Bretton Woods system is that:
A)the Bretton Woods system was a system dominated by Great Britain while the gold standard was dominated by France.
B)the Bretton Woods system allowed the fixed exchange rates to be adjusted when there were clear market disequilibria present.
C)the Bretton Woods system focused on the use of silver where the gold standard focused on gold.
D)none of the above.
11
In order to defend a fixed currency against appreciation, the central bank should:
A)buy the appreciating currency.
B)sell the appreciating currency.
C)print dollars.
D)put a currency board in place.





To learn more about the book this website supports, please visit its Information Center.
(c)2010 McGraw-Hill Higher Education
Any use is subject to the Terms of Use and Privacy Notice.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.


EconomicsOnline Learning Center

Home > Chapter 27 > Multiple Choice Quiz