MACROECONOMICS NAME_____________ TEST 4 CHAPTERS 16,17,18,19 AND 20 Chapter 16 1) The idea of the ________ is that people make lifetime consumption plans. A) life-cycle theory of consumption B) invisible hand C) law of demand D) classical theory of investment ANSWER: ______________ 2) According to the life-cycle theory of consumption, people tend to consume ________ they earn during their early and later years. A)
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factors influencing trading between countries, and laws and procedures that protect the trading countries. Effects of an Import Surplus When the United States imports a specific product that is not domestically produced in the United States it will cause a surplus of imports. This happens particularly when a foreign country has a higher supply of an item that the United States does not produce or have a high quantity of. Considering the cost of petroleum in the United States, that product alone can
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According to the political section in this paper, 1994, and its democratic transition has also been a significant transitional year for South Africa’s economy. As stated in the Economist (2010) South Africa is the biggest economy in Africa; furthermore, the World Bank has ranked South Africa as an upper middle-income economy (which accounts for an income of $4,086 to $12,615 per annum) as like as Brazil and China. Additionally, taken several factors into account, the Heritage Foundation (2013) scores
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International Business, 14e (Daniels et al.) Chapter 10 The Determination of Exchange Rates 1) The primary objective of the International Monetary Fund is to ________. A) encourage euro adoption B) promote exchange rate stability C) establish a unilateral system of payments D) foster the power of the foreign exchange market Answer: B Diff: 2 Learning Outcome: Summarize the roles of the international monetary system and global capital market Skill: Concept Objective: 1 2) The
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INTRODUCTION When first looking at an exchange rates, and foreign exchange, there are a few questions which must be considered. What factors affect the demand and supply of Australian dollars in the foreign exchange markets? Distinguish between the possible causes and effects of currency depreciation and a currency appreciation on the Australian economy. What forces have come into play, if any, in the past few years that have affected the value of the Australian dollar? In addition to looking further into those
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Zagreb, Croatia Tel +385(0)1 238 3333 http://www.efzg.hr/wps wps@efzg.hr WORKING PAPER SERIES Paper No. 07-10 Tomislav Ćorić Terms and conditions for the implementation of inflation targeting in Croatia FEB – WORKING PAPER SERIES 07-10 Terms and conditions for the implementation of inflation targeting in Croatia Tomislav Ćorić tcoric@efzg.hr Faculty of Economics and Business University of Zagreb Trg J. F. Kennedya 6 10 000 Zagreb, Croatia The views expressed in this
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Chapter 5 The Financial Environment: Markets, Institutions, and Interest Rates ANSWERS TO END-OF-CHAPTER QUESTIONS 5-1 a. A money market is a financial market for debt securities with maturities of less than one year (short-term). The New York money market is the world’s largest. Capital markets are the financial markets for long-term debt and corporate stocks. The New York Stock Exchange is an example of a capital market. b. Primary markets are the markets in
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Assignment 4 goanho jeon 7722139 1. a) An increase in the money supply shifts the LM curve to the right in the short run. This moves the economy from point A to point B in the figure: the interest rate falls from r1 to r2, and output rises from Y to Y2. The increase in output occurs because the lower interest rate stimulates investment, which increases output
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monetary policy when a. interest rates are rising too rapidly. b. it thinks the unemployment rate is too high. c. the growth rate of real GDP is quite sluggish. d. it thinks inflation is too high today, or will become too high in the future. ANSWER: d it thinks inflation is too high today, or will become too high in the future. SECTION: 1 OBJECTIVE: 1 3. If the Federal Reserve loosened monetary policy today because it believed a recession was going to hit the economy
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it regulates the applicable level of taxes and spending; and monetary policy, through which it manages the supply of money. Discuss the current economic situation in the U.S. as compared to five (5) years ago. Include interest rates, inflation and unemployment rate in your explanation. Interest rates started out in January 2009 at 3.8% and by the end of the year in December 2009 the interest rates had been cut down to 3.2%. According to the daily treasury, interest rates are
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