国际金融英文版阿普尔亚德 配套习题Assignment3.docx

1、国际金融英文版阿普尔亚德 配套习题Assignment 3Assignment 3CHAPTER 7 ECONOMIC POLICY IN THE OPEN ECONOMYUNDER FIXED EXCHANGE RATESPart 1. Multiple-Choice Questions (only one answer is right)1. In the ordinary analysis of IS and LM curves (ignoring the BP curve),a. expansionary fiscal policy shifts the IS curve to the

2、 left.b. expansionary monetary policy shifts the LM curve to the left. c. expansionary fiscal and expansionary monetary policy undertaken at the same time will lead to an increase in the level of equilibrium income.d. expansionary fiscal policy and contractionary monetary policy acting together will

3、 lead to a decline in the equilibrium interest rate.2. In the graph below, if point W represents the income and interest rate targets under a countrys fixed exchange rate system, then the policy combination needed to reach point W consists of a. expansionary monetary policy and expansionary fiscal p

4、olicy.b. expansionary monetary policy and contractionary fiscal policy.c. contractionary monetary policy and contractionary fiscal policy.d. contractionary monetary policy and expansionary fiscal policy.3. In the Mundell prescription for monetary and fiscal policy under fixed exchange rates, expansi

5、onary fiscal policy and contractionary monetary policy would be recommended if a country were faced with a. unemployment and a balance-of-payments deficit.b. unemployment and a balance-of-payments surplus.c. inflation and a balance-of-payments deficit.d. inflation and a balance-of-payments surplus.4

6、. In a closed economy, an increase in the demand for money shifts the LM curve to the _; other things equal, this will lead to _ in the level of national income.a. right; an increase b. right; a decrease c. left; an increase d. left; a decrease5. In the analysis of the use of expansionary or “easy”

7、fiscal policy undertaken by a countrys government in a situation of fixed exchange rates, the policy leads to _ of the countrys current account balance (or trade balance) and, if short-term capital is highly mobile between countries, the policy _ of the countrys capital/financial account balance.a.

8、an improvement; also leads to an improvement)b. an improvement; leads to a deterioration (or worsening) c. a deterioration (or worsening); leads to an improvementd. a deterioration (or worsening); also leads to a deterioration (or worsening)6. Under fixed exchange rates and a constant price level, t

9、he automatic adjustment process produces balance-of-payments equilibrium as a. the LM curve shifts along the fixed IS and BP curves.b. the IS curve shifts along the fixed LM and BP curves.c. the IS, LM, and BP curves all shift.d. the BP curve shifts to the point where the IS and LM curves intersect.

10、7. In the following diagram, with fixed exchange rates,the economy is in domestic equilibrium at income level _ and there is _.a. Y1; a balance-of-payments surplusb. Y2; a balance-of-payments deficit c. Y2; a balance-of-payments surplusd. Y3; equilibrium in the balance of payments8. In the Mundell a

11、nalysis in which, in a situation of fixed exchange rates, a country is using monetary and fiscal policy to attain “external balance” (i.e., balance-of-payments equilibrium) and “internal balance” (i.e., full employment without inflation), the country _. In this context, if the country has a balance-

12、of-payments surplus at the same time that it has inflation, the country should engage in _. a. should assign monetary policy to the attainment of internal balance and fiscal policy to the attainment of external balance; expansionary (“easy”) monetary policy and contractionary (“tight”) fiscal policy

13、 b. should assign monetary policy to the attainment of internal balance and fiscal policy to the attainment of external balance; contractionary (“tight”) monetary policy and expansionary (“easy”) fiscal policy c. should assign monetary policy to the attainment of external balance and fiscal policy t

14、o the attainment of internal balance; expansionary (“easy”) monetary policy and contractionary (“tight”) fiscal policy d. should assign monetary policy to the attainment of external balance and fiscal policy to the attainment of internal balance; contractionary (“tight”) monetary policy and expansio

15、nary (“easy”) fiscal policy9. Under fixed exchange rates,a. fiscal policy is ineffective in influencing national income with all degrees of international capital mobility. b. fiscal policy is most effective in influencing national income when capital is perfectly mobile internationally.c. monetary p

16、olicy is very effective in influencing national income if capital is perfectly immobile internationally.d. monetary policy is more effective when capital is perfectly mobile internationally than when capital is perfectly immobile internationally.10. In a system of fixed exchange rates, the automatic

17、 balance-of-payments adjustment process for a country with a balance-of-payments deficit would theoretically involve, among other things, _ in the interest rate and _ in national income.a. a decrease; a decrease b. a decrease; an increase c. an increase; a decrease d. an increase; an increase11. In

18、the diagram below, under fixed exchange rates, the automatic adjustment mechanism will lead to a. a fall in the money supply, a fall in income, and a fall in the interest rate.b. a rise in the money supply, a fall in income, and a fall in the interest rate.c. a fall in the money supply, a rise in in

19、come, and a rise in the interest rate. d. a fall in the money supply, a fall in income, and a rise in the interest rate.12. Under a fixed exchange rate, a balance-of-payments surplus for a country will lead to a _ in the money supply as the countrys central bank _ in order to maintain the fixed exch

20、ange rate. a. rise; purchases domestic currency b. rise; purchases foreign exchange c. fall; sells domestic currency d. fall; sells foreign exchange13. A general rule is that, as international capital mobility for a country increases, the countrys BP curve _.a. becomes steeper (less elastic)b. maint

21、ains the same slope (or elasticity) c. becomes flatter (more elastic)d. eventually will become downward-sloping 14. In the IS-LM analysis (and ignoring the BP curve), if the economy is located at a point that is to the left (or below) the IS curve and also to the left (or above) the LM curve, there

22、is _ pressure in the real sector of the economy as well as an excess _ money. a. expansionary; demand for b. expansionary; supply of c. contractionary; demand for d. contractionary; supply of15. Other things equal, a fall in the marginal propensity to save will make the IS curve _, and a rise in the

23、 responsiveness of short-term international financial capital to changes in the interest rate will make the BP curve _. a. flatter of more elastic; flatter or more elasticb. flatter or more elastic; steeper or less elasticc. steeper or less elastic; flatter or more elasticd. steeper or less elastic;

24、 steeper or less elastic16. Suppose, in the basic Mundell-Fleming diagram, that the economy is located at a point that is above (or to the left) of the internal balance (IB) schedule and also above (or to the left) of the external balance (EB) schedule. In this situation the economy is experiencing

25、a. unacceptably high unemployment and a balance-of-payments deficit. b. unacceptably high unemployment and a balance-of-payments surplus. c. unacceptably rapid inflation and a balance-of-payments deficit. d. unacceptably rapid inflation and a balance-of-payments surplus. 17. Other things equal, if t

26、he demand for money becomes more elastic, then the LM curve will become _, i.e., a given rise in the interest rate will, in order for money market equilibrium to be preserved, be associated with a _ rise in income. a. less elastic; smaller b. less elastic; larger c. more elastic; smaller d. more ela

27、stic; larger18. Assume an initial equilibrium position for the economy (at the three-way intersection of the IS, LM, and BP curves), and also assume that the BP curve is vertical. This situation is one where there is _ of financial capital internationally, and, from this initial equilibrium, expansi

28、onary fiscal policy would initially lead to a balance-of-payments _. a. perfect immobility; surplus b. perfect immobility; deficit c. perfect mobility; surplus d. perfect mobility; deficit19. From an initial equilibrium position for the economy (at the three-way intersection of the IS, LM, and BP cu

29、rves), and if the LM curve is steeper than the BP curve, expansionary fiscal policy initially leads to a balance-of-payments (BOP) _, and expansionary monetary policy _.a. deficit; also initially leads to a BOP deficitb. deficit; initially leads to a BOP surplus c. surplus; initially leads to a BOP

30、deficitd. surplus; also initially leads to a BOP surplus20. With imperfect capital mobility, the BP curve slopes upward because, starting from a given balance-of-payments equilibrium position, a rise in national income will tend to cause a _, which must be counteracted by a rise in the interest rate

31、 in order to cause a _ that will restore BOP equilibrium. a. BOP deficit; short-term financial capital inflowb. BOP deficit; short-term financial capital outflowc. BOP surplus; short-term financial capital inflowd. BOP surplus; short-term financial capital outflowPart 2 Definition1. BP Curve 2. Relative capital immobility3. Relative capital mobilityPart 3 Simple Questions1. Please compare the effects of fiscal and monetary policy under fixed exchange rates. 2. Please explain the implication of im