An appreciation of the British pound relative to the euro will cause England's:
a. Aggregate supply and aggregate demand to rise, which causes prices to rise and real GDP to fall.
b. Aggregate supply to rise and aggregate demand to fall, which causes prices to rise and real GDP to fall.
c. Aggregate supply to rise and aggregate demand to fall, which causes prices to fall and real GDP to change by an uncertain amount.
d. Aggregate supply and aggregate demand to fall, which causes prices to rise and real GDP to fall.
Question 2 - Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and the monetary base in the context of the Three-Sector-Model?
a. The quantity of real loanable funds rises and monetary base rises.
b. The quantity of real loanable funds falls and monetary base rises.
c. The quantity of real loanable funds falls and monetary base falls.
d. The quantity of real loanable funds and monetary base remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Question 3 - The Phillips Curve is:
a. A theoretical relationship between inflation and the real risk-free interest rate.
b. A statistical relationship between a nation's current account and its inflation rate.
c. A statistical, historical relationship between inflation and unemployment.
d. A theoretical relationship between inflation and unemployment.
e. A curve showing Phillips-head screwdriver sales in various countries during the 1960s.
Question 4 - Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and GDP Price Index in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period rises and GDP Price Index rises.
b. The quantity of real loanable funds per time period falls and GDP Price Index falls.
c. The quantity of real loanable funds per time period rises and GDP Price Index falls.
d. The quantity of real loanable funds per time period and GDP Price Index remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Question 5 - The Phillips Curve relationship is most closely associated with:
a. Cost-push inflation.
b. Demand-pull inflation.
c. Push-push inflation.
d. Excessive government regulation.
e. The appreciation of exchange rates for open economies that rely heavily on foreign inputs.
Question 6 - Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to real GDP and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. Real GDP falls and nominal value of the domestic currency remains the same.
b. Real GDP and nominal value of the domestic currency remain the same.
c. Real GDP falls and nominal value of the domestic currency rises.
d. Real GDP falls and nominal value of the domestic currency falls.
e. There is not enough information to determine what happens to these two macroeconomic variables.
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