A. not be affected
B. fluctuate more than if exports were lower
C. depreciate
D. appreciate
Macroeconomic Issues and Analysis
If currency dealers expect the value of the pound to fall, the exchange value will tend to ?
A. depreciate
B. not be affected
C. fluctuate more than it would do therwise
D. appreciate
If the US economy is forecast to come out of recession because military expenditure has increase then the exchange value of the UK pound will tend to ?
A. depreciate
B. not be affected
C. fluctuate more than it would do therwise
D. appreciate
If the economy is in the expansionary phase of the business cycle, aggregate demand …. unemployment …. inflation …. payments is likely to move towards ….?
A. falls; rise; falls; surplus
B. is static; low; rise; deficit;
C. falls; falls; falls; surplus
D. rise; falls; rises; deficit
If the economy is in the recessionary phase of the business cycle, aggregate demand … unemployment …. inflation … and the current account of the balance of payments is likely to move towards ….?
A. falls; falls; falls; surplus
B. is static; low; rises; deficit
C. falls; rises; falls; surplus
D. rises; falls; rises; deficit
If British residents want more French francs to purchase more French cloths other things equal, then the equilibrium value of the pound against the French franc will ?
A. rise
B. fall
C. not change
D. fluctuate
A current account deficit means that a country may ?
A. reduce its stock of foreign assets
B. increase its stock of foreign assets
C. increases its savings
D. increases its foreign currency reserves
A rise in the real exchange rate will …….. the competitiveness of the domestic economy?
A. increase
B. reduce
C. do nothing to
D. None of the above
perfect international capital mobility suggests that international funds will be responsive to …….. differentials?
A. current account
B. interest rate
C. tax
D. price
With fixed exchange rates and no private currency flows, when the central bank buys domestic currency the domestic money supply is ?
A. increased
B. unaffected
C. reduced
D. None of these