国际金融英文版阿普尔亚德 配套习题Assignment3.docx

国际金融英文版阿普尔亚德 配套习题Assignment3.docx

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国际金融英文版阿普尔亚德配套习题Assignment3

Assignment3

CHAPTER7ECONOMICPOLICYINTHEOPENECONOMY

UNDERFIXEDEXCHANGERATES

Part1.Multiple-ChoiceQuestions（onlyoneanswerisright）

1.IntheordinaryanalysisofISandLMcurves（ignoringtheBPcurve）,

a.expansionaryfiscalpolicyshiftstheIScurvetotheleft.

b.expansionarymonetarypolicyshiftstheLMcurvetotheleft.

c.expansionaryfiscalandexpansionarymonetarypolicyundertakenatthesametimewillleadtoanincreaseinthelevelofequilibriumincome.

d.expansionaryfiscalpolicyandcontractionarymonetarypolicyactingtogetherwillleadtoadeclineintheequilibriuminterestrate.

2.Inthegraphbelow,ifpointWrepresentstheincomeandinterestratetargetsunderacountry’sfixedexchangeratesystem,thenthepolicycombinationneededtoreachpointWconsistsof

a.expansionarymonetarypolicyandexpansionaryfiscalpolicy.

b.expansionarymonetarypolicyandcontractionaryfiscalpolicy.

c.contractionarymonetarypolicyandcontractionaryfiscalpolicy.

d.contractionarymonetarypolicyandexpansionaryfiscalpolicy.

3.IntheMundellprescriptionformonetaryandfiscalpolicyunderfixedexchangerates,expansionaryfiscalpolicyandcontractionarymonetarypolicywouldberecommendedifacountrywerefacedwith

a.unemploymentandabalance-of-paymentsdeficit.

b.unemploymentandabalance-of-paymentssurplus.

c.inflationandabalance-of-paymentsdeficit.

d.inflationandabalance-of-paymentssurplus.

4.Inaclosedeconomy,anincreaseinthedemandformoneyshiftstheLMcurvetothe__________;otherthingsequal,thiswillleadto__________inthelevelofnationalincome.

a.right;anincreaseb.right;adecrease

c.left;anincreased.left;adecrease

5.Intheanalysisoftheuseofexpansionaryor“easy”fiscalpolicyundertakenbyacountry’sgovernmentinasituationoffixedexchangerates,thepolicyleadsto__________ofthecountry’scurrentaccountbalance（ortradebalance）and,ifshort-termcapitalishighlymobilebetweencountries,thepolicy__________ofthecountry’scapital/financialaccountbalance.

a.animprovement;alsoleadstoanimprovement）

b.animprovement;leadstoadeterioration（orworsening）

c.adeterioration（orworsening）;leadstoanimprovement

d.adeterioration（orworsening）;alsoleadstoadeterioration（orworsening）

6.Underfixedexchangeratesandaconstantpricelevel,theautomaticadjustmentprocessproducesbalance-of-paymentsequilibriumas

a.theLMcurveshiftsalongthefixedISandBPcurves.

b.theIScurveshiftsalongthefixedLMandBPcurves.

c.theIS,LM,andBPcurvesallshift.

d.theBPcurveshiftstothepointwheretheISandLMcurvesintersect.

7.Inthefollowingdiagram,withfixedexchangerates,

theeconomyisindomesticequilibriumatincomelevel__________andthereis__________.

a.Y1;abalance-of-paymentssurplus

b.Y2;abalance-of-paymentsdeficit

c.Y2;abalance-of-paymentssurplus

d.Y3;equilibriuminthebalanceofpayments

8.IntheMundellanalysisinwhich,inasituationoffixedexchangerates,acountryisusingmonetaryandfiscalpolicytoattain“externalbalance”（i.e.,balance-of-paymentsequilibrium）and“internalbalance”（i.e.,fullemploymentwithoutinflation）,thecountry__________.Inthiscontext,ifthecountryhasabalance-of-paymentssurplusatthesametimethatithasinflation,thecountryshouldengagein__________.

a.shouldassignmonetarypolicytotheattainmentofinternalbalanceandfiscalpolicytotheattainmentofexternalbalance;expansionary（“easy”）monetarypolicyandcontractionary（“tight”）fiscalpolicy

b.shouldassignmonetarypolicytotheattainmentofinternalbalanceandfiscalpolicytotheattainmentofexternalbalance;contractionary（“tight”）monetarypolicyandexpansionary（“easy”）fiscalpolicy

c.shouldassignmonetarypolicytotheattainmentofexternalbalanceandfiscalpolicytotheattainmentofinternalbalance;expansionary（“easy”）monetarypolicyandcontractionary（“tight”）fiscalpolicy

d.shouldassignmonetarypolicytotheattainmentofexternalbalanceandfiscalpolicytotheattainmentofinternalbalance;contractionary（“tight”）monetarypolicyandexpansionary（“easy”）fiscalpolicy

9.Underfixedexchangerates,

a.fiscalpolicyisineffectiveininfluencingnationalincomewithalldegreesofinternationalcapitalmobility.

b.fiscalpolicyismosteffectiveininfluencingnationalincomewhencapitalisperfectlymobileinternationally.

c.monetarypolicyisveryeffectiveininfluencingnationalincomeifcapitalisperfectlyimmobileinternationally.

d.monetarypolicyismoreeffectivewhencapitalisperfectlymobileinternationallythanwhencapitalisperfectlyimmobileinternationally.

10.Inasystemoffixedexchangerates,theautomaticbalance-of-paymentsadjustmentprocessforacountrywithabalance-of-paymentsdeficitwouldtheoreticallyinvolve,amongotherthings,__________intheinterestrateand__________innationalincome.

a.adecrease;adecreaseb.adecrease;anincrease

c.anincrease;adecreased.anincrease;anincrease

11.Inthediagrambelow,underfixedexchangerates,theautomaticadjustmentmechanismwillleadto

a.afallinthemoneysupply,afallinincome,andafallintheinterestrate.

b.ariseinthemoneysupply,afallinincome,andafallintheinterestrate.

c.afallinthemoneysupply,ariseinincome,andariseintheinterestrate.

d.afallinthemoneysupply,afallinincome,andariseintheinterestrate.

12.Underafixedexchangerate,abalance-of-paymentssurplusforacountrywillleadtoa__________inthemoneysupplyasthecountry’scentralbank__________inordertomaintainthefixedexchangerate.

a.rise;purchasesdomesticcurrencyb.rise;purchasesforeignexchange

c.fall;sellsdomesticcurrencyd.fall;sellsforeignexchange

13.Ageneralruleisthat,asinternationalcapitalmobilityforacountryincreases,the

country’sBPcurve__________.

a.becomessteeper（lesselastic）

b.maintainsthesameslope（orelasticity）

c.becomesflatter（moreelastic）

d.eventuallywillbecomedownward-sloping

14.IntheIS-LManalysis（andignoringtheBPcurve）,iftheeconomyislocatedatapointthatistotheleft（orbelow）theIScurveandalsototheleft（orabove）theLMcurve,thereis__________pressureintherealsectoroftheeconomyaswellasanexcess__________money.

a.expansionary;demandforb.expansionary;supplyof

c.contractionary;demandford.contractionary;supplyof

15.Otherthingsequal,afallinthemarginalpropensitytosavewillmaketheIScurve__________,andariseintheresponsivenessofshort-terminternationalfinancialcapitaltochangesintheinterestratewillmaketheBPcurve__________.

a.flatterofmoreelastic;flatterormoreelastic

b.flatterormoreelastic;steeperorlesselastic

c.steeperorlesselastic;flatterormoreelastic

d.steeperorlesselastic;steeperorlesselastic

16.Suppose,inthebasicMundell-Flemingdiagram,thattheeconomyislocatedatapointthatisabove（ortotheleft）oftheinternalbalance（IB）scheduleandalsoabove（ortotheleft）oftheexternalbalance（EB）schedule.Inthissituationtheeconomyisexperiencing

a.unacceptablyhighunemploymentandabalance-of-paymentsdeficit.

b.unacceptablyhighunemploymentandabalance-of-paymentssurplus.

c.unacceptablyrapidinflationandabalance-of-paymentsdeficit.

d.unacceptablyrapidinflationandabalance-of-paymentssurplus.

17.Otherthingsequal,ifthedemandformoneybecomesmoreelastic,thentheLMcurvewillbecome__________,i.e.,agivenriseintheinterestratewill,inorderformoneymarketequilibriumtobepreserved,beassociatedwitha__________risein

income.

a.lesselastic;smallerb.lesselastic;larger

c.moreelastic;smallerd.moreelastic;larger

18.Assumeaninitialequilibriumpositionfortheeconomy（atthethree-wayintersectionoftheIS,LM,andBPcurves）,andalsoassumethattheBPcurveisvertical.Thissituationisonewherethereis__________offinancialcapitalinternationally,and,fromthisinitialequilibrium,expansionaryfiscalpolicywouldinitiallyleadtoabalance-of-payments__________.

a.perfectimmobility;surplusb.perfectimmobility;deficit

c.perfectmobility;surplusd.perfectmobility;deficit

19.Fromaninitialequilibriumpositionfortheeconomy（atthethree-wayintersectionoftheIS,LM,andBPcurves）,andiftheLMcurveissteeperthantheBPcurve,expansionaryfiscalpolicyinitiallyleadstoabalance-of-payments（BOP）__________,andexpansionarymonetarypolicy__________.

a.deficit;alsoinitiallyleadstoaBOPdeficit

b.deficit;initiallyleadstoaBOPsurplus

c.surplus;initiallyleadstoaBOPdeficit

d.surplus;alsoinitiallyleadstoaBOPsurplus

20.Withimperfectcapitalmobility,theBPcurveslopesupwardbecause,startingfromagivenbalance-of-paymentsequilibriumposition,ariseinnationalincomewilltendtocausea__________,whichmustbecounteractedbyariseintheinterestrateinordertocausea__________thatwillrestoreBOPequilibrium.

a.BOPdeficit;short-termfinancialcapitalinflow

b.BOPdeficit;short-termfinancialcapitaloutflow

c.BOPsurplus;short-termfinancialcapitalinflow

d.BOPsurplus;short-termfinancialcapitaloutflow

Part2Definition

1.BPCurve

2.Relativecapitalimmobility

3.Relativecapitalmobility

Part3SimpleQuestions

1.Pleasecomparetheeffectsoffiscalandmonetarypolicyunderfixedexchangerates.

2.Pleaseexplaintheimplicationofim