Question Details

The existence of the international sector causes fiscal policy to 


1. "Indeed, the yen may have to stay strong for two years or more, many experts say, to have much impact on American-Japanese trade." This is because of 
a) the J curve b) capital inflows 
c) high U.S. interest rates d) high Japanese interest rates 
2. A country with an undervalued currency 
a) is hurting exporters b) will have a balance of payments deficit 
c) will accumulate reserves of foreign currency 
d) will experience downward pressure on its exchange rate 
3. A sterilization policy applied after a decrease in the money supply should cause 
a) the exchange rate to flex b) no change in our foreign exchange reserves 
c) our foreign exchange reserves continually to fall 
d) our foreign exchange reserves continually to rise 
4. The existence of the international sector causes fiscal policy to 
a) be weaker, but only under fixed exchange rates 
b) be stronger, but only under fixed exchange rates 
c) be stronger, but only under flexible exchange rates 
d) be completely ineffective, but only under a fixed exchange rate 
5. Under flexible exchange rates a small open economy should 
a) lose control of its monetary policy b) be insulated from its trading partners' inflation 
c) tend to experience the inflation of its trading partners 
d) find that changes in its interest rates match changes in its trading partner's interest rates



Economics Assignment Help, Economics Homework help, Economics Study Help, Economics Course Help