Você está na página 1de 5

Short Self Test

Take this quiz by selecting the radio button for the best answer to each question. Afterwards, check your answers
by clicking directly on the text of your chosen answer.

Question 1: Consider our simple flexprice monetary approach model of flexible exchange rates. When the
domestic interest rate increases,
a) foreign money demand falls and foreign output falls.
b) foreign money demand falls and foreign output rises.
c) domestic money demand falls and the domestic currency depreciates.
d) domestic money demand falls and domestic output falls.
e) domestic money demand falls and the domestic currency appreciates.

Question 2: Which of the following characterize the early 1990s in Zaire (now Democratic Republic of the
Congo)?
a) High inflation, high money growth, and rapid depreciation of Zaire's currency.
b) Low inflation, slow money growth, and slow depreciation of Zaire's currency.
c) Low inflation, slow money growth, but rapid depreciation of Zaire's currency.
d) High inflation, high money growth, but slow depreciation of Zaire's currency.
e) None of the other resonses.

Question 3: In our short-run model of the money market, an increase in the money supply causes
a) a rise in the interest rate
b) a rise in the price level
c) a rise in the real money supply
d) a fall in the price level
e) a fall in the real money supply

Question 4: The law of one price


a) is purely conventional.
b) is legally enforced, like a traffic law.
c) holds only under very special conditions, and so is frequently violated in real markets.
d) is sometimes violated, but very rarely.
e) always holds, like any natural law.

Question 5: In our short-run model of the money market, an increase in domestic real income causes
a) a rise in the interest rate
b) a fall in the interest rate
c) a fall in the money supply
d) a rise in the money supply
e) a rise in the real money supply

Question 6: In our asset-markets only model, in the short run, we expect a one-time, permanent increase in
the foreign money supply to
a) raise the foreign price level proportionately.
b) lower the domestic price level proportionately.
c) raise foreign real GDP proportionately.
d) lower the foreign interest rate.
e) lower foreign real GDP proportionately.

Question 7: Suppose a BigMac costs USD 5.00 or CHF 6.50. Then the USD-CHF PPP exchange rate is
a) 8.25
b) 82.5
c) 1.3
d) 0.77
e) not computable from this information.

Question 8: Suppose a BigMac costs USD 5.00 or CHF 6.50. Then the CHF-USD PPP exchange rate is
a) 8.25
b) 0.77
c) 82.5
d) 1.3
e) not computable from this information.

Question 9: In the long run, we expect a one-time, permanent increase in the foreign money supply to
a) lower the domestic price level proportionately.
b) raise foreign real GDP proportionately.
c) lower foreign real GDP proportionately.
d) lower the foreign interest rate.
e) raise the foreign price level proportionately.

Question 10: The Big Mac Standard constructs a fairly standardized market basket for PPP comparisons,
and the basic ingredients are standardized and internationally traded. The result of international
comparisons on this standard is
a) clear evidence in favor of absolute PPP.
b) clear evidence in favor of long-run PPP.
c) clear evidence in favor of relative PPP.
d) none of these responses are correct
e) clear evidence against absolute PPP.

Question 11: Our flexprice monetary approach to exchange rate determination predicts that an increase in
expected domestic inflation causes
a) the domenstic currency to appreciate
b) the domenstic currency to depreciate.
c) no change in the spot rate.
d) a one period lagged effect on domestic prices.
e) none of the other responses

Question 12: Under relative purchasing power parity, at given real incomes, if the inflation rate is the same in
the US and the EU,
a) the EUR-USD exchange rate will be unity.
b) the USD will depreciate against the EUR.
c) the EUR will depreciate against the USD.
d) the spot rate will undergo long swings.
e) the EUR-USD exchange rate between the US will remain unchanged.
Question 13: Consider our basic Classical model of price determination. A rise in our expected inflation rate
a) All of these responses are true.
b) raises the nominal interest rate
c) lowers real money demand.
d) lowers the real money supply.
e) raises our prices.

Question 14: The long-run neutrality of money is the idea that


a) all nominal flow variables move proportionally to the money supply.
b) all real stock variables move proportionally to the money supply.
c) all real flow variables move proportionally to the money supply.
d) all nominal stock variables move proportionally to the money supply.
e) the economy is completely unaffected by the money supply in the long run.

Question 15: The Fisher effect'' predicts that an increase in expected inflation leads to
a) a decrease in the nominal interest rate.
b) an increase in the real interest rate.
c) a decrease in the real interest rate.
d) an increase in the nominal interest rate.
e) a. and c.

Question 16: In the long run, we expect a one-time, permanent increase in the money supply to:
a) raise real GDP proportionately.
b) lower real GDP proportionately.
c) raise the interest rate proportionately.
d) raise the price level proportionately.
e) lower the interest rate.

Question 17: Which of the following characterize PPP between the US and Canada over the last half
century?
a) Because of their geographical proximity, PPP holds closely and continuously.
b) PPP holds pretty well in the short run, but fails as a long-run proposition.
c) PPP fails because the real exchange rate shows continual appreciation over the decades.
d) PPP fails because the real exchange rate shows continual depreciation over the decades.
e) Despite their geographical proximity, we see large and sustained deviations from PPP.

Question 18: Consider our simple flexprice monetary approach model of flexible exchange rates. A one-time,
permanent, unanticipated increase in the level of the money supply causes a long-run
a) increase in price level.
b) increase in nominal interest rates.
c) decrease in real balances.
d) decrease in money demand.
e) appreciation of the domestic currency.

Question 19: Consider our flexprice monetary approach model of exchange rate determination. A one-time
permanent decline in the domestic money supply causes the price level to
a) eventually fall, increasing the interest rate.
b) fall right away, leaving the interest rate constant
c) fall right away, causing a reduction in the interest rate.
d) fall right away, causing an increase in the interest rate.
e) eventually fall, leaving the interest rate constant

Question 20: Theoretically, the twin deficits hypothesis'' proves


a) robust across Keynesian'' models, but not Classical'' models.
b) quite robust across models.
c) robust across Classical'' models, but not Keynesian'' models.
d) to be a rare implication of Keynesian and Classical models.
e) an extremely fragile theoretical result.

Question 21: The Balassa-Samuelson'' critique of purchasing-power parity focuses on


a) the inclusion in national price indices of both traded and non-traded goods.
b) all of these responses are correct.
c) shifts in relative prices.
d) sectorally asymmetric productivity change.
e) differential income growth.

Question 22: Suppose 1 CHF buys 1 USD, and a BigMac costs USD 5.00 or CHF 6.50. Then the USD is
overvalued relative to the CHF by
a) -23%
b) 30%
c) 77%
d) 130%
e) not computable from this information.

Question 23: As a response to a one-time, permanent increase in the money supply, exchange-rate
overshooting takes place when
a) the short-run depreciation of the exchange rate exceeds the long-run appreciation.
b) the short-run appreciation of the exchange rate exceeds the long-run appreciation.
c) the short-run appreciation of the exchange rate exceeds the long-run depreciation.
d) the exchange rate overshoots the predictions of professional forecasters.
e) the short-run depreciation of the exchange rate exceeds the long-run depreciation.

Question 24: Consider our simple flexprice monetary approach model of flexible exchange rates. A rise in
domestic income
a) lowers relative income.
b) none of the other responses
c) lowers relative money demand.
d) raises relative prices.
e) depreciates the exchange rate.

Question 25: Suppose 1 CHF buys 1 USD, and a BigMac costs USD 5.00 or CHF 6.50. Then the CHF is
overvalued relative to the USD by
a) 130%
b) 77%
c) -23%
d) not computable from this information.
e) 30%
Start Over Jump to Top