Answered: If Canadians wanted significantly more…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

If Canadians wanted significantly more French products than usual, the:
A. demand curve for the euro would shift right.
B. demand curve for the euro would shift left.
C. supply curve for the euro would shift right.
D. supply curve for the euro would shift left.

EU product price levels have stayed the same over the last year while inflation in the US has increased. EU
exports will :
A. increase and EU. imports decrease, causing the demand for Euros to rise and the supply of Euros to fall.
B. decrease and EU. imports increase, causing the demand for Euros to fall and the supply of Euros to rise.
C. decrease and EU imports decrease, causing the demand for Euross to rise and the supply of Eurosto rise.
D. increase and EU. imports decrease, causing the demand for Euros to fall and the supply of Euros to rise.

The recent increase in the Fed Funds rate at the direction of the Federal Reserve tends to:
A. lower U.S. prices, make exports more expensive relative to imports, and lower the value of the dollar.
B. lower U.S. prices, make exports cheaper relative to imports, and raise the value of the dollar.
C. raise U.S. prices, make exports cheaper relative to imports, and raise the value of the dollar.
D. raise U.S. prices, make exports more expensive relative to imports, and lower the value of the dollar.

Of the four choices below, which causes a shift in the Supply of dollars to the right?
A. An expansionary fiscal policy that raised U.S. income and increased U.S. imports.
B. An expansionary fiscal policy that raised U.S. income and reduced U.S. imports.
C. A contractionary fiscal policy that reduced U.S. income and lowered U.S. imports.
D. A contractionary fiscal policy that reduced U.S. income and increased U.S. imports.

I showed how the Euro depreciated 10 percent against the dollar over the last couple years. As a
result, European:
A. exports rose, boosting the economy.
B. imports rose, boosting the economy.
C. exports declined, dragging down the economy.
D. imports declined, dragging down the economy.

China has a current trade surplus and considering only the direct effect on income, if the Chinese National
bank used expansionary monetary policy, the policy would tend to:
A. decrease the exchange rate and increase the trade surplus.
B. increase the exchange rate and increase the trade surplus.
C. decrease the exchange rate and decrease the trade surplus.
D. increase the exchange rate and decrease the trade surplus.

The likely effect of a contractionary monetary policy in Japan would be to:
A. decrease the value of the dollar and the U.S. trade deficit.
B. increase the value of the dollar and the U.S. trade deficit.
C. decrease the value of the dollar and increase the U.S. trade deficit.
D. increase the value of the dollar and decrease the U.S. trade deficit.

In April 2022 the Federal Reserve boosted its target for the Federal funds rate for the first time in 14 years,
increasing it from a 10-year low of .25% to 4.25%. What role did the Biden Administration have in this
decision?
A. None; the Fed is not accountable to the executive branch of government.
B. Some; most but not all of the people who voted for this change are appointees of the Bush Administration.
C. Considerable; if the Bush Administration were unhappy with the decision, it could force the resignation of
those who voted in ways it did not like.
D. Total; policy makers at the Fed serve at the pleasure of the President.

The price of American goods have slowed and decreased in part to which of the following:
A. Outsourcing.
B. Increases in educational scoring.
C. law of one price
D. globalization and increased trade

In 2001, the Bush Administration increased spending by $100 billion and raised taxes by $70 billion at the
same time. It’s likely that:
A. interest rates will most likely not increase.
B. interest rates will most likely increase.
C. business investment is not likely to change.
D. business investment is likely to increase due to crowding out

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