Liberty University ECON 214 Exam 4 · 2 out of 2 points The two types of monetary policy are: · 2 out of 2 points An agreement by one country to limit the volume of exports to another country is known as a(n): · 2 out of 2 points On March 1, 2013, the price of a jar of pickles was 135 Mexican pesos at a supermarket in Juarez, Mexico. Based on the exchange rates quoted in the table, the price of the jar of pickles was approximately _____________ U.S. dollars. · 2 out of 2 points According to the theory of monetary neutrality, in the long run: · 2 out of 2 points When a foreign supplier sells a good below the price it charges in its home country, this is called: · 2 out of 2 points On November 1, 2012, the price of a skateboard at JJ’s Beach Shop was 120 U.S. dollars in La Jolla, California. On April 1, 2013, the price of a skateboard was 130 U.S. dollars. Using the exchange rates in the table, between November 1, 2012, and April 1, 2013, the price of a skateboard at JJ’s Beach Shop increased by approximately ___________ in terms of U.S. dollars and ____________ in terms of British pounds. (Round the British pound price two decimal points and the percentage changes to the first decimal point.) · 0 out of 2 points Currency ___________ occurs when a currency increases in value relative to other currencies. · 2 out of 2 points Which of the following explains why resource prices are often the slowest prices to adjust? · 2 out of 2 points One argument for trade restriction focuses on new industries. It can be summarized in the following manner: · 2 out of 2 points Amy’s opportunity cost of producing one pound of cheese is _____________ house(s). · 2 out of 2 points Citizens can consume the largest quantities of goods and services in which of the following situations? · 2 out of 2 points Between February 1, 2013, and April 1, 2013, the U.S. dollar ___________ against the euro, and the euro ____________ against the U.S. dollar. · 2 out of 2 points 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. · 2 out of 2 points As the prices of goods and services decrease, the value of money: · 2 out of 2 points A deprecation of the euro against the U.S. dollar is represented by Figure ___________, and a depreciation of the U.S. dollar against the euro is represented by Figure _____________. · 2 out of 2 points The Federal Reserve’s response to the Great Recession was an attempt to:
· 2 out of 2 points _______________________ would be hurt by unexpected inflation. · 2 out of 2 points Based on the scenario, which of the following is true? · 2 out of 2 points The trade-restriction view assumes that free trade is __________ and should be _____________. · 2 out of 2 points One of the reasons given for the imposition of a protectionist policy such as a tariff is to: · 2 out of 2 points A cost-of-living adjustment clause: · 2 out of 2 points The combination of high unemployment rates and high inflation is called: · 2 out of 2 points The euro is an unusual currency because: · 2 out of 2 points If inflation is expected: · 0 out of 2 points Based on the scenario, which of the following is true? · 2 out of 2 points Assuming the theory of purchasing power parity holds, if the exchange rate between the United States and Japan is $0.011 per yen (¥), then how much does a $400 Microsoft Xbox cost in Japanese yen? · 2 out of 2 points Adaptive expectations theory: · 2 out of 2 points Assuming the theory of purchasing power parity holds, if the exchange rate between the United States and Europe is $1.33 per euro, then how much does a €35 bottle of French champagne cost in U.S. dollars? · 2 out of 2 points When inflation is expected, the real effect on the economy is: · 2 out of 2 points Based on the scenario, Esther’s opportunity cost of one hamburger is: · 2 out of 2 points The strategic use of monetary policy to counteract macroeconomic expansions and contractions is known as: · 0 out of 2 points According to adaptive expectations theory, if the last three years of inflation were 3%, 3%, and 2%, respectively, one would expect inflation the following year to be: · 2 out of 2 points Stagflation is: · 2 out of 2 points Based on the scenario, Albert’s opportunity cost of one hot dog is: · 2 out of 2 points The traditional short-run Phillips curve implies that: · 0 out of 2 points Suppose a Chinese citizen buys a box of Nestlé Kit Kat candy bars from America and Nestlé uses the currency to purchase Chinese-manufactured televisions. How will this transaction enter into the U.S. balance of payments? · 2 out of 2 points _______________________ would be hurt by unexpected inflation. · 2 out of 2 points Which of the following explains expansionary monetary policy in the long run? · 2 out of 2 points ______________ occurs when a national government or central bank intentionally adjusts its money supply to affect the exchange rate of its currency. · 2 out of 2 points Based on the scenario, which of the following is true?