国际金融选择

第一章 ? 1. If a nation's domestic savings equals 6 and a nation's domestic investment equals 10, then the nation is experiencing: – A. a net capital outflow. – B a net capital inflow. – C. no net capital inflow or outflow. – D. a current account surplus. ? 2. If domestic investment is greater than domestic saving, – A. expenditures equal domestic income and net exports equal zero. B. expenditures are greater than domestic income and net exports are negative. C. expenditures are less than domestic income and net exports are positive. D. expenditures are greater than domestic income and net exports are positive zero. ? 3. A current account deficit in the U.S. is: A. necessarily bad because it represents a lack of domestic saving. B. necessarily good because it represents foreign savings in the U.S. C. necessarily bad because it undermines the U.S.'s ability to experience economic growth. – D.is neither good nor bad. ? 4. The balance of payments system – A. is another method for calculating GDP. – B. insures that the net exports are always equal to zero. – C. measures the total value of a domestic economy's transactions with the rest of the world. – D. attempts to limit the fluctuation in international exchange rates. ? 5. The balance on merchandise trade is a component of – A. the current account. – B. the capital account. – C. foreign direct investment. – D. portfolio investment. ? 6. A debit entry in the balance of payments accounts represents – A. a transaction that includes a payment from abroad a domestic resident. – B. a transaction that includes a payment abroad by a domestic resident. – C. a decrease in the current account deficit. – D. an increase in the capital account surplus. ?7. Which of the following transactions are not included in the current account? – A. Exports of manufactured goods. – B. Imports of manufactured goods. – C. Payments of interest and dividends on foreign assets held by a domestic U.S. resident. – D. The purchase of foreign assets by a domestic U.S. resident. ?8. When a country faces a current account deficit, it also faces: – A. a services trade deficit. – B. a capital account deficit. – C. a capital account surplus. – D. a merchandise trade deficit. ?9. In terms of balance of payments accounting, which of the following would be recorded as a debit entry? – A. Exports of merchandise. – B. Exports of services. – C. A foreigner's purchase of a U.S. Treasure bond. – D. An increase in a U.S. citizen's account at a foreign bank. ?10. Suppose an American tourist travels to Mexico, and uses U.S. dollars to purchase a hotel room in Mexico City. This transaction is recorded as a – A. credit in the current account and debit in the capital account. – B. debit in the capital account and a credit in the current account. – C.credit in the capital account and debit in the current account. – D.credit in the capital account and debit in the capital account. ?11. The United States is currently a net debtor nation. This necessarily implies that the – A.federal government owes money to foreign investors. – B.value of U.S. held assets abroad is lower than the value of foreign held assets in the U.S. – C.value of the U.S. dollar is less than the average value of foreign currencies. – D.U.S. is running a deficit in manufactured goods trade. ?12. After accounting for statistical discrepancies, a capital account – A. surplus will always imply a current account surplus. – B. surplus will always imply a current account deficit. – C. surplus will always exceed the associated current account surplus. – D. deficit will always exceed the associated current account surplus. ?13. Foreign direct investment is a component of – A. portfolio investment. – B. the current account. – C. total trade in services. – D. the capital account. ?14. In order for the purchase of stocks to be categorized as foreign direct investment, it must represent at least _______ percent of the foreign entity's outstanding stock A. 1 B. 10 C. 25 D. 40 ?15. Purchases of stock that are too small too be considered foreign direct investment are classified as – A. depreciation. – B. investment spending. – C. portfolio investment. – D. capital investment. 第二章 1. For which of the following sets of exchange rates has the cross rate been correctly calculated? – A. ￡1 = 2 Swiss francs; $1.50 = ￡1; $1 = 0.75 Swiss francs – B. ￥200 = $1.00; 1 ringgit = $0.15; 20 ringgit = ￥1 – C. ￡1 = 1.5 euro; 3 Swiss francs = 2 euros; 2.25 Swiss francs = ￡1 – D. ￥100 = $1.00; 1 ringgit = $0.15; 20 ringgit = ￥1 2. Suppose the exchange rate between the U.S. dollar and the Canadian dollar is 1.37 (C$/$), while the exchange rate for the British pound is 0.66 (￡/$). What is the cross rate of Canadian dollars to the British pound (C$/￡)? – A. 2.08 B. 1.37 C. 0.66 D. 0.48 3. An American tourist is planning to visit Mexico. The exchange rate at which the tourist can buy pesos in a retail bank is the: – A. bid price. – B. ask price. – C. forward rate. – D. cross rate. 4. Suppose the bid price of British pounds is $1.49 U.S., and the ask price is $1.51 U.S. What is the bid ask margin? – A. 0.02% – B. 0.99% – C. 1.01% – D. 1.32% 5. Which of the following exchange rates is adjusted for price changes? – A. Nominal exchange rate. – B. Real exchange rate. – C. Effective exchange rate. – D. Forward exchange rate. 6. The table below reports the movements of prices and exchange rates for the U.S. and Indonesia over a year's time. (B) July 1, 2003 July 1, 2004 _____________________________ Indonesian rupiah/$U.S. 2,435 14,500 Indonesian price level (CPI) 100 152 U.S. price level (CPI) 100 102 During this time, the Indonesian rupiah experienced a nominal A. depreciation and a real appreciation. B. depreciation and a real depreciation. C. appreciation and a real appreciation. D. appreciation and a real depreciation. 7. The effective exchange rate is – A. the exchange rate facing large banks and other high-volume traders. – B. the exchange rate facing retail customers. – C. the nominal exchange rate adjusted for inflation. – D. a measure of the weighted-average value of a currency relative to a selected group of countries. 8. The Special Drawing Right (SDR) is a – A. means by which banks offer their best clients preferential loan rates. – B. preliminary form of the proposed common currency in Europe. – C. composite currency created by the International Monetary Fund. – D. type of bank account used by currency traders. 9. If U.S. demand for German products increases at the same time as German demand for U.S. products rises, what is the effect on the U.S. dollar to euro exchange rate? – A. The U.S. dollar will appreciate relative to the euro. – B. The U.S. dollar will depreciate relative to the euro. – C. The U.S. dollar will not change relative to the euro. – D. The U.S. dollar may appreciate, depreciate, or remain unchanged relative to the euro. 10. Which basket of goods would be most likely to exhibit absolute purchasing power parity? – A. The goods in the Consumer Price index. – B. Specialized luxury goods, which are subject to different tax rates across countries. – C. Locally produced goods, such as transportation services, which are not easily traded. – D. Highly tradable commodities, such as wheat. 11. The difference between relative and absolute purchasing power parity (PPP) is A. relative PPP includes a measure of the aggregate price level in each country, while PPP does not. B. empirical studies show that relative PPP holds in both the short and long run, while absolute PPP holds only in the short run. C. relative PPP relates interest rate differentials, while absolute PPP relates goods prices. D. relative PPP implies that exchange rate movements will offset changes in relative prices over time, while absolute PPP implies that exchange-rate adjusted prices will always be equal. 12. If the price of a pair of shoes in the U.S. is $80, the price of the same pair of shoes in Germany is €120, and the exchange rate is 1.5 $/€, the euro: – A. is correctly valued according to PPP. – B. is overvalued according to PPP. – C. is undervalued according to PPP. – D. correctly valued according to relative PPP. 13. Assume that PPP holds in the long run. If the price of a tradable good is $20 in the U.S. and 100 pesos in Mexico and the exchange rate is 7 pesos/$, which of the following changes might we expect in the future? – A. an increase in the price of the good in the U.S. – B a decrease in the price of the good in Mexico. – C. an appreciation of the peso in nominal terms. – D. a depreciation of the peso in nominal terms. 第三章 1. The principle function of the International Monetary Fund was originally to – A. lend to member nations experiencing a shortage of foreign exchange reserves. – B. finance postwar reconstruction, particularly in Europe and Japan. – C. reduce trade barriers and settle disputes among countries relating to currency negotiations. – D. act as a supranational regulatory agency for domestic central banks. The gold standard was in place for most major economics of the world during the period – A. from the beginning of the Great Depression until World War II. – B. from 1973 until the present. – C. from the mid-1870s until World War I. – D. since the end of World War II. 3. Under the gold standard, if the mint parity condition for the French franc was set at Ffr107.1 per ounce of gold, and the German mark was set at DM88.7 per ounce of gold, then it is possible to compute the exchange rate between the German mark and the French franc (DM/f) as approximately – A. 0.83. – B. 1.21. – C. 9490.9 – D. It is not possible to compute the exchange rate between the mark and the franc with these values, because these values are relative to the price of gold. 4. Under the Bretton Woods system, most of the major currencies of the system, other than the U.S. dollar, – A. pegged their values against the value of an ounce of gold. – B. pegged their values against the value of the dollar. – C. allowed their currencies to float. – D. pegged their values against the value of the Euro. 5. In the Plaza Agreement of September, 1985, the "Group of Five" or "G5" countries announced that they believed that – A. the "G5" needed to be expanded to include an additional five major industrialized countries to make up what is now referred to as the "G10". – B. the Bretton Woods system would no longer be sustainable. – C. it was necessary to "float" the dollar relative to gold. – D. the exchange value of the dollar was too strong and that they would coordinate their central bank interventions in order to drive down the value of the dollar. 6. An example of a country that maintained a crawling-peg exchange-rate system during the early 2000s is – A. the United States. – B. Canada. – C. France. – D. Nicaragua. 7. A currency board is an ? A. exchange market in which the major currencies of the world are exchanged on the open market among private banks at prevailing rates. ? B. independent monetary agency that substitutes for a central bank by pegging the growth of the domestic money stock to the foreign-exchange holdings of the board. ? C. independent monetary agency which is responsible for setting bank reserve requirements for the domestic currency. ? D. exchange market in which the notes and bills issued by the domestic government are traded on the open market among private banks. 8. Which of the following arrangements places the greatest restriction on policymakers and requires the greatest sacrifice of policy autonomy? – A. a free float. – B. a currency-basket peg. – C. dollarization. – D. a currency board. 9. If the Chinese renminbi, whose unit of currency is the yuan, is revalued relative to the U.S. dollar, then – A. for each yuan, one can expect to buy fewer dollars. – B. for each yuan, one can expect to buy more dollars. – C. the exchange rate between the renminbi and the dollar will remain constant. – D. it is impossible to tell what will happen to the exchange rate or the number of dollars that one can buy with each yuan, since this depends on the supply and the demand for the yuan relative to the dollar. 10. Currency basket pegs usually involve pegging the domestic currency to – A. each of the major currencies of the world. – B. the relative price of a chosen basket of consumer goods. – C. a weighted average of only a small selected number of different currencies. – D. within an upper and lower limit of a band relative to either the U.S. dollar or the Japanese yen. 11. A "dirty float" exchange rate system refers to – A. an exchange rate system wherein policymakers allows the value of the domestic currency to be determine only by the forces of supply and demand. – B. an exchange rate system whereby each of the members of the system peg their currency against one of the major currencies, such as the U.S. dollar, which is in turn pegged against a commodity, such as gold. – C. an exchange rate arrangement in which the domestic currency is primarily managed by the central bank of a foreign country, which is typically the major trading partner. – D. an exchange rate arrangement in which a nation allows the international value of its currency to be primarily determined by market forces, but intervenes occasionally to stabilize its currency. 12. Which of the following did not contribute to the eventual collapse of the Bretton Woods system? – A. Increased federal spending for social programs termed the "Great Society" under the Johnson administration. – B. Heightened U.S. involvement in Vietnam. – C. The conditions set forth in the Louvre Accord. – D. U.S. balance of payments deficits with Germany and Japan. 13. Which of the following is an example of a commodity money that has been used extensively? – A. Credit cards. – B. Demand deposits and certificates of deposit. – C. Gold. – D. The Euro. 14. A key challenge to the exchange rate system of the leading industrialized countries in the 1970s came as a consequence of – A. a rapid increase in the price of petroleum. – B. the formation of the Bundesbank. – C. the heightening of Cold War tensions. – D. the establishment of many currency baskets worldwide. 15. The IMF constitution was amended to allow member nations to determine their own exchange rate arrangements under the – A. Smoot-Hawley Act. – B. Jamaica Accord. – C. Smithsonian Agreement. – D. Treaty of Rome. 16. The gold window for the U.S. dollar was closed by – A. President Ronald Reagan. – B. President James Carter. – C. Federal Reserve Chairman Paul Volker. – D. President Richard Nixon. 17. An advantage of a flexible exchange rate system is that it – A. can help a country overcome external shocks such as an unusual inflow of capital from abroad. – B. can reduce the volatility of nominal exchange rate over time. – C. eliminates the need for the central bank to target interest rates. – D. ensures a greater volume of trade in goods and services among member countries. 18 Which of the following is a principal function of the International Monetary Fund? – A. To act as a forum for international monetary cooperation. – B. To provide central banks with a range of financial services for managing their external reserves. – C. To act as a lender of last resort for countries facing temporary external balance of payments problems. – D. To act as an agent or trustee which facilitates the implementation of various international financial agreements. 第四章 1. Your Canadian-based firm expects to receive a euro-payment in 30 days. Your firm is: – A. short the Canadian dollar. – B. long the Canadian dollar. – C. short the euro. – D. long the euro. 2. Your Canadian-based firm expects to receive a euro-payment in 30 days. This is an example of: – A. covered arbitrage. – B. transaction exposure. – C. translation exposure. – D. risk premium. 3. The act of offsetting exposure to risk is known as – A. dodging. – B. hedging. – C. speculating. – D. avoidance. 4. A covered exposure is one – A. that is backed by the government. – B. in which exposure to foreign exchange risk is offset. – C. that is established via foreign direct investment. – D. that is impossible in most bond markets. 5. A market in which contracts for a future delivery of a foreign currency are established is: – A. the S&P 500. – B. the spot exchange market. – C. the forward exchange market. – D. global capital market. 6. A short position in a foreign currency implies that the investor – A. will deliver the foreign currency in the future. – B. will receive the foreign currency in the future. – C. has an economic exposure. – D. has a translation exposure. 7. If the forward exchange rate, defined as the domestic currency price of the foreign currency, is greater than the spot exchange rate there is a: – A. forward premium on the foreign currency. – B. forward discount on the foreign currency. – C. shortage of dollars. – D. surplus of dollars. 8. The forward premium has proved to be – A. a stable predictor of the future spot rate. – B. a near-perfect predictor of future spot rates. – C. a biased predictor of future spot rates. – D. of no help in predicting future spot rates. 9. The existence of unexploited profit opportunities is referred to as – A. the parity condition. – B. equilibrium. – C. interest rate parity. – D. an arbitrage opportunity. 10. Interest rate equalization across countries on similar financial instruments is called – A. sterilization. – B. optimization. – C. interest rate parity. – D. an arbitrage opportunity. 11. Covered interest rate parity implies that the difference between the domestic and foreign interest rates should equal – A. zero. – B. the forward premium or discount. – C. the purchasing power parity exchange rate. – D. the yield to maturity. 12. The condition relating interest differentials to an expected change in the spot rate of the domestic currency is called – A. covered interest rate parity. – B. uncovered interest rate parity. – C. absolute purchasing power parity. – D. relative purchasing power parity. 13. The additional risk of a currency due to political instability is referred to as – A. anarchy. – B. the discount factor. – C. unhedgeable. – D. country risk. 14. If market participants could forecast perfectly, then one would expect the A. forward premium to be equal to the difference between the future spot rate and the current spot rate, divided by the current spot rate. B. current spot rate to be equal to the future spot rate minus the current spot rate. C. forward premium to be equal to the future spot rate. D. forward premium to be equal to the current spot rate. 15. Suppose that a currency speculator notes that the 90-day forward rate on the euro is $1.10/€. Suppose further that the speculator believes that i n 90 days the spot rate will be $1.20/€. If this is the case, the speculator should do which of the following to earn a profit? – A. Buy U.S. dollars on the forward market. – B. Sell euros on the forward market. – C. Buy euros on the forward market. – D. Sell U.S. dollars in the spot market. 16. The most likely reason why the forward rate actually does a poor job of forecasting the future spot exchange rate is the – A. presence of irrational expectations. – B. presence of a variable risk premium. – C. unpredictability of interest rates. – D. notoriously inaccurate nature of the data on forward rates. 17. A bank deposit denominated in a currency other than that of the nation in which the bank deposit is located is referred to as a(n): – A. ADR. – B. reciprocal transfer. – C. Eurocurrency. – D. Eurobond. 18. One theory of the of the origin of the Eurocurrency markets has to do with the A. development of a black market for illegally obtained funds. B. former Soviet Union moving U.S. assets to Europeans banks for security reasons. C. U.S. lending to European allies during WWII. D. former Soviet Union selling off its reserves of U.S. dollars. 19. The uncovered interest rate parity is a condition regarding A. nominal interest rates and future spot exchange rates. B. real interest rates and future spot exchange rates. C. nominal interest rates and current spot exchange rates. D. real interest rates and current spot exchange rates. 第五章 1. A bond with no fixed maturity date is called a – A. discount bond. – B. callable bond. – C. treasury bill. – D. perpetuity. 2. A bond with an infinite payment life will have a price A. equal to the present discounted value of its principal. B. equal to the coupon amount divided by the interest rate. C. equal to the coupon amount divided by one plus the interest rate. D. that is arbitrarily high, as it will produce coupon payments forever. 3. Suppose the price of a perpetuity is $1,000 and that the perpetuity pays a coupon of $60 per year. The interest rate on this bond is – A. 0.06 percent. – B. 0.60 percent. – C. 6 percent. – D. 60 percent. 4. Suppose a perpetuity pays $100 per year and its interest rate is 8%. Its price is equal to – A. $80. – B. $125. – C. $800. – D. $1,250. 5. The yield curve displays the relationship among yields on bonds that differ only in their – A. country of origin. – B. terms to maturity. – C. bond rating. – D. default risk. 6. The segmented markets theory is grounded in the assumption that A. inflation will be prevalent in only certain long-term bonds. B. investors have identical preferences for all bond maturities. C. bonds with different maturities are nonsubstitutable. D. domestic investors prefer domestic bonds. 7. An investor using the expectations theory would buy a two-year bond at the present time only if its yield is A. greater than or equal to the average of the one-year spot rate and the expected spot rate a year later. B. less than the average of the one-year spot rate and the expected spot rate a year later. C. greater than or equal to the expected spot rate a year later. D. greater than or equal to the one-year spot rate. 8. Because of the possibility of default and low liquidity, some bonds carry – A. no premium. – B. a risk premium. – C. a margin account. – D. a lower interest rate. 9. The primary reason that municipal bonds earn a lower interest rate than treasury bonds is that – A. municipal bonds have less risk. – B. treasury bonds are in greater supply. – C. municipal bonds are often serial type bonds. – D. the interest earned on municipal bonds is tax-exempt. 10. Reinvestment risk arises from a situation in which A. long-term instruments prevent investors from acting to take advantage of increases in interest rates. B. an investor cannot be guaranteed the same interest rate when rolling over short-term instruments. C. the investor suffers from an inability to liquidate short-term instruments at opportune times. D. an instrument cannot be transferred back into the domestic currency immediately. 11. The real interest rate is defined as the A. nominal interest rate plus the expected rate of price inflation. B. expected rate of price inflation minus the nominal interest rate. C. nominal interest rate minus the expected rate of price inflation. D. nominal interest rate divided by the expected rate of price inflation. 12. A swap is a contract between parties in which the parties – A. exchange flows of payments. – B. agree to the future price of a currency exchange. – C. exchange future cash flows for past cash flows. – D. have the right to buy an underlying asset at a fixed price. – 13. One way to lock in a future interest rate is to buy – A. a stock index option. – B. a series of short-term bonds. – C. an interest rate forward contract. – D. a currency exchange forward contract. 14. A major difference between a forward contract and a future contract is that only a future contract is – A. a standardized contract that is traded over an exchange. – B. available exclusively from commercial banks. – C. available for any amount and maturity. – D. limited to large contracts. 15. An option on a financial instrument gives the holder the A. right to purchase or sell an underlying financial instrument at a given price. B. obligation to purchase or sell an underlying financial instrument at a given price. C. right to purchase or sell an underlying financial instrument at its future spot price. D. obligation to purchase or sell an underlying financial instrument at its future spot price . 16. A call option gives the holder the right to ______an instrument whereas a put option gives the holder the right to ________. – A. exercise; confiscate. – B. sell; purchase. – C. purchase; sell. – D. transfer; sell. 第六章 1. Financial intermediation refers to A. the dealings between private banks and the central bank of that nation. B. legislation which is directed toward the regulation of the banking industry. C. the calculations involved in pricing financial instruments. D. indirect finance through the services of financial institutions that channel funds from savers to investors. 2. International financial diversification can best be described as A. holding financial instruments of various durations in order to spread portfolio risks. B. holding financial instruments issued in various countries to spread portfolio risks. C. investing in multinational firms traded on the domestic stock exchange. D. using information on global trends to help forecast domestic trends. 3. An advantage to holding a world index fund is that it contains a group of globally issued financial instruments which historically have – A. had higher returns. – B. outperformed the S&P. – C. displayed a tendency to move together. – D. displayed a tendency to move in offsetting directions. 4. A key rationale for the traditional U.S. prohibition against universal banking was that A. U.S. bank managers typically did not have the expertise to participate in equity markets. B. U.S. banks were ill suited to handle the foreign exchange risk inherent in universal banking. C. the specialty of banks U.S. banks was their ability to take in deposits and loans. D. U.S. equity shares tended to be riskier than government securities. 5. For a government desiring a profitable, safe banking system, which of the following is not an argument for allowing banks to hold equities in their portfolios? A. Equities typically offer larger returns than bonds. B. Equity and bond returns have a tendency to move in opposite directions. C. Banks would be able to gain access to additional information about portfolio risks. D. Banks already do in effect hold equities by virtue of the fact that they provide loans to private firms. 6. When a bank's assets fall below the value of its liabilities it is said to be – A. illiquid. – B. insolvent. – C. below par. – D. inseparable. – ?7. When a bank is temporarily unable to honor depositors’ requests to withdraw funds, it is – A. illiquid. – B. insolvent. – C. below par. – D. inseparable. ?8. The possibility that a bank may experience a loss due to failure to receive a promised payment is an example of – A. liquidity risk – B. systemic risk. – C. Herstaat risk. – D. credit risk. ?9. The risk that late receipt of a payment may generate a loss for a bank is an example of – A. systemic risk. – B liquidity risk. – C. Herstaat risk. – D. credit risk. ?10. If the failure of a domestic bank to make a promised payment to another domestic bank causes the latter bank to fail to honor its own obligations to another party, this is an example of – A. liquidity risk – B. systemic risk. – C. Herstaat risk. – D. credit risk. ?11. If the failure of a foreign bank to make a promised payment to a domestic bank causes the latter bank to fail to honor its own obligations to another party, this is an example of – A. liquidity risk – B. systemic risk. – C. Herstaat risk. – D. credit risk. ?12. Which of the following is typically not offered by governments as a rationale for bank regulation? – A. preventing bank insolvency – B. maximizing bank efficiency – C. preventing bank illiquidity – D. maximizing bank profits ?13. A fundamental difficulty typically involved in the regulation of banks is A. how to balance the tradeoffs between solvency and normal profits. B. determining which legislation is federal or state. C. how to gain access to their financial statements. D. avoidance of adverse selection. ?14. The interest rate the Federal Reserve charges banks on loans is called the – A. interbank loan rate. – B. cost-of-carry rate. – C. discount rate. – D. LIBOR. ?15. Assets issued by the IMF as a type of international currency intended to compensate for the declining role of gold as a basis for the world's currency system are called – A. gold certificates. – B. turnover accounts. – C. special drawing rights. – D. American deposit receipts. ?16. The actions of a central bank have the potential to alter the anticipation of near-term changes in market conditions in what is known as – A. adaptive expectations. – B. a mean reverting trend. – C. an announcement effect. – D. a time inconsistency problem. ?17. An open-market operation occurs when a central bank – A. alters the reserve requirements. – B. sets the discount rate below par. – C. purchases or sells government or private securities. – D. uses its foreign exchange reserves to alter the exchange rate. 第七章 ? 1. Foreign capital inflows tend to: A. destabilize the domestic economy by reinforcing domestic business cycles. B. destabilize the domestic economy by offsetting domestic business cycles. C. stabilize the domestic economy by reinforcing domestic business cycles. D. stabilize the domestic economy by offsetting domestic business cycles. ? 2. Recent research suggests that financial development: A. negatively affects economic development by diverting resources from the development of real resources. B. negatively affects economic development by encouraging less saving. C. positively affects economic development by encouraging less saving. D. positively affects economic development by directing funds to the most productive resources. ? 3. How do portfolio flows compare in time frame compare to foreign direct investment flows? A. Portfolio flows tend to be short run in nature while FDI flows tend to be long run. B. Both portfolio and foreign direct investment flows tend to be short run in nature. C. Both portfolio and foreign direct investment flows tend to be long run in nature. D. Portfolio flows tend to be long run in nature while FDI flows tend to be short run. ? 4. Which of the following is not a standard theory for explaining financial crises? A. Economic fundamentals. B. Self fulfilling expectations and contagion effects. C. Structural moral hazard problems. D. efficient intermediaries. ? 5. Financial intermediaries perform all of the following functions except: – A. matching savers and borrowers. – B. increasing average costs of investment – C. reducing information asymmetries. – D. pooling risks. ? 6. Portfolio capital flows tend to ____________ and foreign direct investment flows tend to __________. A. generate near term income, establish financial control. B. establish financial control, generate near term income. C. both tend to generate near term income. D. both tend to establish financial control. ?7. By their nature, portfolio flows _______ and foreign direct investment ___________. – A. are difficult to reverse, are easy to reverse. – B. are to easy reverse, are difficult to reverse. – C. both are easy to reverse. – D. both are difficult to reverse. – ?8. The World Bank issues loans aimed at: A. improving overall budget resources for needy countries. B. improving national defense in needy countries. C. improving specific projects to accelerate economic development. D. accelerating short term projects. ?9. Some economists argue that capital controls should be used to: – A. reduce FDI inflows. – B. reduce domestic interest rates. – C. reduce short-term capital inflows. – D. maximize capital flows into the domestic economy. 10. The Corners Hypothesis asserts that: A. Policymakers should avoid the “corner” regimes and adopt a “middle-ground” exchange rate regime. B. Policymakers should avoid the “middle-ground” regimes and adopt a “corner” exchange rate regime. C. Policymakers should “corner” capital flows with the use of capital controls. D. Policymakers should realize any type of exchange rate regime might be appropriate, and not rely only on the “corner” regimes. ?11. Dollarization has been recommended for some emerging economies because it might: A. completely eliminate risk premium that is drive a wedge between domestic interest rates and advanced-economy interest rates. – B. eliminate seigniorage revenues. – C. provide a lender of last resort. – D. promote greater integration with large economies. 12. Dollarization means that policymakers: A. Peg the value of their currency to the U.S. dollar via a currency board arrangement. B. value transactions of their most important export in U.S. dollars. C. allow the value of the domestic currency to float vis a vis the U.S. dollar. D. abandon their domestic currency as adopt another currency as their sole legal tender. 第八章 ? 1. The elasticities approach emphasizes the effects of changes in _______ in determining the of balance of payments and the exchange rate. – A. the quantities of goods. – B. the relative supply of money – C. the prices of goods – D. real income ? 2. The Marshall-Lerner condition specifies: – A. a necessary condition for exchange rate stability. – B. a sufficient condition for exchange rate instability. – C. when a central bank should intervene in foreign exchange markets. – D. the guidelines set forth in GATT. ? 3. The Marshall-Lerner condition holds when the: – A. sum of the elasticities of import demand and export supply exceed one. – B. difference in the elasticites of import demand and export supply exceed one. – C. difference in the absolute values of the elasticites of import demand and export supply exceed one. – D. sum of the absolute values of the elasticities of import demand and exports supply exceed one. ? 4. The reason one expects supply and demand to be more price elastic over longer time periods is because: – A. goods with longer shelf life have higher elasticities. – B. there are feedback affects which alter the initial response. – C. time is needed for households and businesses to adjust to price changes. – D. the elasticity of supply always exceeds that of demand. ? 5. A phenomenon in which a depreciation of the domestic currency causes a nation's balance of payments to worsen before it improves is called: – A. the J-curve effect. – B. the S-curve effect. – C. devaluation. – D. pass-through effects. ? 6. The basic assumption underlying the J-curve effect is that: – A. people are myopic in their views of how the exchange rate will evolve over time. – B. initially, supply will exceed demand but in equilibrium the two will be equated. – C. supply and demand are less elastic in the short run than in the long run. – D. an overshooting effect occurs as people change their investment horizons. ? ?Answer: C ?7. The idea that a country's trade balance may first deteriorate after a currency devaluation and only later improve is known as: – A. the relative price effect. – B. the elasticity effect. – C. the pass through affect. – D. the J-Curve. – ?8. The absorption approach to exchange rate and balance of payments determination is based on: – A. the relative prevalence of traded goods in an economy. – B. demographic trends which alter the demand for imports. – C. how much of GDP is consumed by government. – D. the difference between real income and absorption levels. 9. Which of the following is not included in a nation's expenditures? – A. Consumption. – B. Investment. – C. Government spending. – D. Exports. ?10. Domestic absorption includes expenditures on final goods and services in which four basic categories? – A. Consumption, investment, government, and exports. – B. Consumption, investment, exports, and imports. – C. Consumption, investment, government, and imports. – D. Investment, government, exports, and imports. ?11. A nation is running a current account deficit if: – A. imports are less than exports and real income is less than absorption. – B. imports are less than exports and absorption is less than real income. – C. exports are less than imports and real income is less than absorption. – D. exports are less than imports and absorption is less than real income. ?12. Devaluation of the domestic currency will induce – A. expenditure switching. – B. a flow of capital out of the country. – C. a revaluation once the trade balance has stabilized. – D. accompanying trade restrictions. 第九章 ? 1. Which of the following is not true about a nation's (simplified) monetary base? – A. It is controlled by the central bank. – B. It is the sum of domestic credit and foreign exchange reserves. – C. It is the sum of foreign exchange reserves and total bank reserves. – D. It is the sum of currency and total bank reserves. ? 2. The method that the Fed often uses in order to offset a foreign exchange intervention is: – A. an adjustment of the reserve requirements. – B. an open-market transaction. – C. an adjustment to the discount rate. – D. to direct the Treasury to print more money. ? 3. The earliest formulation of an open economy model similar in spirit to the monetary approach to the balance of payments can be seen in the work of: – A. Adam Smith. – B. David Ricardo. – C. Milton Friedman. – D. David Hume. ? 4. The equation relating money demand to a fraction of nominal GDP is called the: – A. Fisher equation. – B. absorption approach. – C. Cambridge equation. – D. elasticities approach. ? 5. Under a fixed exchange rate, the additional purchase of foreign goods will generate a balance of payments: – A. surplus with no change in the exchange rate. – B. deficit with no change in the exchange rate. – C. deficit with an appreciation in the exchange rate. – D. surplus with a depreciation in the exchange rate. ? 6. Under a flexible exchange rate, the additional purchase of foreign goods will generate: – A. a depreciation of the domestic currency with a balance of payments surplus. – B. an appreciation of the domestic currency with a balance of payments deficits. – C. an appreciation of the domestic currency with no change in the balance of payments. – D. a depreciation of the domestic currency with no change in the balance of payments. ?7. According to the monetary approach, under a flexible exchange rate arrangement, a rise in domestic credit will result in: – A. a current account deficit and no change in the value of the currency. – B. a current account surplus and no change in the value of the currency. – C. a depreciation of the domestic currency. – D. an appreciation of the domestic currency. ?8. The portfolio approach expands on the monetary approach by recognizing that households may desire to: – A. hold more cash for transaction purposes. – B. alter their portfolios due to country risk. – C. alter their portfolios in response to the business cycle. – D. hold other financial instruments such as domestic and foreign securities. ?9. The simple model of the portfolio approach assumes households choose to hold their wealth in: – A. money, domestic bonds, or foreign bonds. – B. stocks and bonds only. – C. bonds only. – D. money only. ?10. The portfolio approach postulates that, under flexible exchange rates, an open market sale of securities by the domestic central bank will result in: – A. a balance-of-payments surplus. – B. a balance-of-payments deficit. – C. a depreciation of the domestic currency. – D. an appreciation of the domestic currency. ?11. Regarding the issue of sterilization in foreign exchange markets, the monetary and portfolio approaches: – A. offer similar theoretical results. – B. offer conflicting answers. – C. consider only fixed and flexible exchange rate systems, respectively. – D. can be reconciled by considering both domestic and foreign policy actions. ?12. According to the monetary approach, fully sterilized foreign intervention is: – A. ineffective. – B. extremely potent. – C. only somewhat potent. – D. impossible to carry out. ?13. A central bank sterilizes its foreign exchange interventions in order to: – A. signal its future policy intentions. – B. expose counterfeit currencies. – C. retaliate against nations who have imposed trade restrictions. – D. prevent its foreign exchange interventions from influencing the domestic money supply. 第十章 ? 1. Which of the following aggregates is not used in the product approach to tabulating GDP? – A. consumption – B. net exports – C. investment – D. depreciation ? 2. Which of the following expenditure components of U.S. gross domestic product is the largest? – A. consumption spending – B. government spending – C. investment spending – D. net exports ? 3. Which of the following transactions would be included in the value of measured GDP? – A. an illegal drug transaction – B. payment of a monthly cable television bill – C. the sale of a used houseboat that had been manufactured in a previous year – D. an agreement by two individuals to exchange two goods without any monetary transaction ? 4. Real GDP differs from nominal GDP in that it – A. includes the wages of those working abroad. – B. includes the value of household production. – C. does not include services in its measure of output. – D. is adjusted to control for movements in the aggregate price level. ? 5. As a measure of the overall, economy-wide price level, the one that is an implicit index is the – A. producer price index. – B. consumer price index. – C. GDP deflator. – D. Dow Jones index. ? 6. The producer price index (PPI) is – A. always more than the value of the consumer price index, regardless of the choice of base year. – B. always less than the value of the consumer price index, regardless of the choice of base year. – C. a weighted average of the prices of goods and services used as inputs into production. – D. a weighted average of the prices charged by producers of final goods. 7. Which of the following relationships is not a result of the circular flow of income and expenditure? – A. Real net taxes must equal real government expenditure. – B. The real value of income equals the real value of output. – C. Real income equals the sum of real consumption, real net taxes, real imports, and real saving. – D. Real output equals the sum of real consumption, real exports, real government spending and real realized investment. –8. Autonomous dissaving is the amount by which – A. households would reduce their savings as their real disposable income decreases. – B. household's implicit debt obligations would rise as a result of any net government borrowing. – C. households would draw upon their current wealth to purchase domestic consumption if they were to earn no after-tax income. – D. households would reduce their savings if they were to experience a change in their expectations about the future state of the economy. –9. The IS schedule shows the relationship between which two variables? – A. real investment and inflation. – B. the nominal interest rate and real income. – C. real government spending and real net taxes. – D. the nominal interest rate and real money balances. –10. Suppose MPC = 0.6, MPS = 0.3 and MPIM = 0.1. A $1 billion increase in autonomous expenditure would lead to a _____ increase in equilibrium real income. – A. $3.33 billion – B. $10 billion – C. $2.5 billion – D. $1 billion –11. Keynes proposed three motives for demanding positive real money balances. Which of these was not based on one of the motives proposed by Keynes? – A. portfolio motive – B. transactions motive – C. reinvestment motive – D. precautionary motive –12. The LM schedule shows the relationship between which two variables? – A. aggregate real income and the price level – B. the price level and the nominal money stock – C. the nominal interest rate and aggregate real income – D. the nominal interest rate and real investment spending –13A balance-of-payments equilibrium is defined as a situation in which – A. net exports are equal to zero. – B. net foreign borrowing is equal to zero. – C. real money balances equals aggregate real consumption. – D. the sum of the capital and current account balances is equal to zero. 第十四章 ? 1. The policy assignment problem involves – A. assigning monetary and fiscal policymakers to pursue internal or external balance objectives. – B. the assignment of relative weights to domestic output, employment, and inflation objectives. – C. the assignment of relative weights to exchange-rate and balance-of-payments objectives. – D. assigning monetary and fiscal policy instruments to central banks or finance ministries. ? ? 2. Exchange-rate overshooting refers to – A. a smooth adjustment of the money stock to its long-run value following an event that triggers a change in the exchange rate. – B. a smooth adjustment of the exchange rate to its long-run value following an event that triggers a change in aggregate demand. – C. a short-run adjustment of the money stock to its long-run value following an event that triggers a change in the exchange rate. – D. a short-run adjustment of the exchange rate to a value beyond the long-run level following an event that triggers a change in aggregate demand. ? 3. When exchange-rate overshooting occurs following an increase in the quantity of money in circulation in a small open economy with a floating exchange rate, – A. the domestic currency initially depreciates in the short run but then must appreciate somewhat as part of a long-run adjustment. – B. the domestic currency initially appreciates in the short run but then must depreciate somewhat as part of a long-run adjustment. – C. the domestic currency depreciates in the short run and then depreciates further as part of a long-run adjustment. – D. the domestic currency appreciates in the short run and then appreciates further as part of a long-run adjustment. ? 4. When exchange-rate overshooting occurs following a decrease in the quantity of money in circulation in a small open economy with a floating exchange rate, – A. the domestic currency initially depreciates in the short run but then must appreciate somewhat as part of a long-run adjustment. – B. the domestic currency initially appreciates in the short run but then must depreciate somewhat as part of a long-run adjustment. – C. the domestic currency depreciates in the short run and then depreciates further as part of a long-run adjustment. – D. the domestic currency appreciates in the short run and then appreciates further as part of a long-run adjustment. ? 5. In nations in which exchange-rate overshooting occurs, – A. the exchange rate will always adjust immediately to its long-run value. – B. short-run price-level variability will exceed exchange-rate variability. – C. exchange-rate variability will exceed short-run price-level variability. – D. the price level will always adjust immediately to its long-run value. ? 6. In a country in which greater openness causes the domestic price level to adjust more rapidly in response to changes in input prices, including the prices of imported inputs, it is more likely that – A. there will be a larger inflation bias associated with discretionary monetary policymaking. – B. aggregate output will be less responsive to a change in the price level in the short run. – C. the short-run aggregate supply schedule will be shallower. – D. the sacrifice ratio will be larger. ?7. In a nation in which greater openness reduces the pricing power available to firms in imperfectly competitive product markets, it is more likely that ? A. there will be a larger inflation bias associated with discretionary monetary policymaking. ? C. aggregate output will be more responsive to a change in the price level in the long run. ? B. aggregate output will be less responsive to a change in the price level in the short run. ? D. the sacrifice ratio will be larger. –8. Consider a nation with a central bank that is part of its government’s finance ministry. A recent increase in the degree of openne ss has caused a decline in inflation that has induced workers to agree to more contracts fixing nominal wages for periods as long as a year. The result is likely to be – A. an increased long-run sensitivity of aggregate output to a change in the price level. – B. an increased short-run sensitivity of aggregate output to a change in the price level. – C. a steeper short-run aggregate supply . – D. a smaller sacrifice ratio. –9. If the sacrifice ratio increases, then a decline in aggregate demand has a – A. larger effect on real output in the long run. – B. larger effect on real output in the short run. – C. smaller effect on real output in the long run. – D. smaller effect on real output in the short run. 10. Which of the following statements is correct? – A. Sinc e 1973, evidence from the world’s developing nations indicates a negative relationship between openness and inflation. – B. Since 1973, evidence from the full set of the world’s nations indicates at best a weak positive relationship between openness and inflation. – C. Since the late 1980s, evidence from the world’s most developed nations indicates a very strong negative relationship between openness and inflation. – D. Since the late 1980s, evidence from the world’s most developed nations indicates at best a weak positive relationship between openness and inflation. –11. One possible rationale for why greater openness might reduce inflation is that a rise in the degree of openness ? A. eliminates the anti-inflationary effects of increased central bank independence, thereby causing real output to be less sensitive to changes in the price level. ? B. in a nation with perfectly competitive product markets causes the aggregate supply schedule to steepen, thereby reducing the incentive for a central bank to boost inflation. ? C. in a nation with imperfectly competitive product markets increases the pricing power available to firms, thereby causing real output to be more sensitive to changes in the price level. ? D. causes product prices to adjust more slowly to prices of imported goods and services, thereby making the aggregate supply schedule shallower and reducing a central bank’s incentive to boost inflation. –12. Which of the following statements is true? – A. In each nation of the world, greater openness is associated with higher inflation. – B. In each nation of the world, greater openness is associated with lower inflation. – C. In some countries, greater openness is associated with lower inflation, but in other nations increased openness is associated with higher inflation. – D. In developed nations, greater openness is associated with lower inflation, but in less developed nations increased openness is associated with higher inflation. –13. A common way to measure the degree of openness in a nation’s economy is via the ratio of – A. imports to exports. – B. exports to imports. – C. total expenditures to imports. – D. imports to total expenditures. – –14. Which one of the following is not a key feature of the new open economy macroeconomics? – A. consumers with different tastes and preferences – B. imperfectly competitive product markets – C. sticky wages and prices – D. dynamic analysis –15. Which one of the following is an advantage of the new open economy macroeconomics? – A. an emphasis on analysis of perfectly competitive markets – B. an emphasis on analysis of complete price adjustment in the long run – C. consideration of important differences in risk aversion among residents of various nations – D. the capability to evaluate the welfare of a society consisting of representative residents of a nation –16. Pricing to market refers to – A. setting prices in terms of the local currencies of sellers rather than in terms of the prices in the locations where consumers purchase products. – B. setting prices in terms of the local currencies of buyers rather than in terms of the prices in the locations where firms manufacture products. – C. the determination of product prices in perfectly competitive markets. – D. the equalization of prices with market costs of production. –17. Price inertia refers to – A. short-term sluggishness of adjustment of a nation’s price level. – B. long-term sluggishness of ad justment of a nation’s price level.– C. short-term volatility of a nation’s price level. – D. long-term volatility of a nation’s price level. –18. In the new open economy macroeconomics, the term “menu costs” refers to – A. small but measurable costs that consumers incur when they purchase products. – B. small but measurable costs that firms incur when they change product prices. – C. significant costs that traders incur when they engage in speculative attacks. – D. significant costs that traders incur when they hedge against currency risks. –19. Dynamic open economy theories – A. emphasize the choices that individuals and firms at a point in time. – B. focus on the determination of prices after all long-run adjustments. – C. focus on the determination of wages after all long-run adjustments. – D. emphasize the choices that individuals and firms make as time passes. 第十五章 ? 1. Structural interdependence is defined as the ? A. relationship between fiscal and monetary policies when the central bank is not fully independent. ? B. link between a short-term increase in cyclical unemployment and a gradual increase in structural unemployment. ? C. relationship between a country's wage-setting institutional structure and the slope of the aggregate supply schedule. ? D. interconnectedness of countries' markets, which causes events in one nation’s economy to affect the economy of another nation. ? 2. Which of the following is an example of an international policy externality? ? A. sterilization. ? B. the locomotive effect ? C. central bank independence ? D. the balance-of-payments schedule ? 3. The Group of Seven is a group of countries that have agreed to engage in ? A. a monetary union. ? B. a fixed exchange rate regime. ? C. international policy cooperation. ? D. a shared independent central bank. ? 4. The Basle agreement, which established common risk-based capital adequacy standards for private banking institutions, is an example of ? A. international policy coordination. ? B. central bank independence. ? C. a monetary policy rule. ? D. high capital mobility. ? 5. In a two-country model with perfect capital mobility and a floating exchange rate, an increase in the domestic stock of money ? A. creates a positive policy externality for the foreign country. ? B. induces an increase in foreign income. ? C. induces a decrease in foreign income. ? D. induces no change in foreign income. ? 6. In a two-country model with perfect capital mobility and a floating exchange rate, a decrease in the foreign money stock leads to a ? A. capital inflow into the domestic economy, an appreciation of the domestic exchange rate, and a reduction in domestic aggregate demand. ? B. capital inflow into the domestic economy, a depreciation of the domestic exchange rate, and a reduction in domestic aggregate demand. ? C. capital outflow from the domestic economy, a depreciation of the domestic exchange rate, and an increase in domestic aggregate demand. ? D. capital outflow from the domestic economy, an appreciation of the domestic exchange rate, and an increa se in aggregate demand. ?7. In the two-country model with perfect capital mobility and a floating exchange rate, each central bank has an incentive to raise the stock of money, raising output in the domestic economy at the expense of the foreign economy. This is an example of ? A. an optimal currency area. ? B. international policy cooperation. ? C. international policy coordination. ? D. a conflict in monetary policymaking. ?8. Which of these is not a benefit of international policy coordination? ? A. reducing national sovereignty ? B. internalizing international policy externalities ? C. gaining support from abroad domestic policy actions ? D. achieving multiple objectives with a limited number of policy instruments ?9. A monetary union is ? A. a geographic region in which labor is not sufficiently mobile to offset asymmetric shocks to aggregate demand. ? B. a range of exchange rates in which the central bank allows the nominal value of the currency to float. ? C. an informal international agreement to fix nominal exchange rates. ? D. a set of countries that choose to use a common currency. ?10. An optimal currency area is ? A. a range of exchange rates within which the central bank allows the exchange rate to float, while at the same time preventing the exchange rate from moving outside that range. ? B. a geographic region in which welfare is greater when the respective governments fix the exchange rate or adopt a common currency. ? C. the quantity of the nominal stock of money that is consistent with the highest level of domestic welfare. ? D. a geographic region in which there are no barriers to trade between countries in the region. ?11. The primary benefit of separate currencies and a floating exchange rate, relative to a monetary union, is that ? A. exchange rate movements generate automatically stabilizing expenditure adjustments in the face of asymmetric shocks. ? B. firms need not hedge the risks associated with currency movements in the face of asymmetric shocks. ? C. there are lower transactions costs in international trade. ? D. monetary policy coordination is easier. ?12. Under a monetary union, adjustment to relative price shocks between regions takes place through ? A. coordinated monetary policy. ? B. nominal exchange rate movements. ? C. the movement of labor among regions of the union. ? D. nonsterilized monetary expansion in the region that experienced the negative demand shock. ?13. Which one of the following is an advantage of a monetary union, as compared to separate, floating currencies? ? A. relative price movements between regions that allow the real wage to adjust, even when the nominal wage is sticky ? B. lower transaction costs in international trade ? C. domestic control of seignorage revenues ? D. currency competition ?14. Arguments against the European Monetary Union include all of the following except that ? A. it would reduce currency conversion costs. ? B. it limits the fiscal autonomy of national governments. ? C. labor mobility within Europe is too low to be consistent with such a union. ? D. some nations have specific sentimental or historical ties to their respective currencies. ?15. The budgetary criteria for admission to the European Monetary Union require each entrant to have ? A. an independent central bank. ? B. a balanced budget and low inflation. ? C. a per capita GDP of at least $20,000. ? D. government debt of less than 60 percent of GDP and a government budget deficit of less than 3 percent of GDP. ?16. Asymmetric shocks are ? A. variations in aggregate conditions that have different effects on separate geographical regions. ? B. incentives that lead central banks to "cheat" on their international commitments. ? C. a measure of the ease with which labor moves between regions. ? D. an example of international policy coordination. ?17. Labor mobility is important to a monetary union because ? A. inflation is necessarily higher in a monetary union. ? B. the central bank in a monetary union cannot alter the stock of money. ? C. the slope of the aggregate supply curve does not depend on contract lengths in monetary unions. ? D. asymmetric shocks induce real wage differentials that may not be offset by changes in a nominal exchange rate. ?18. An exchange rate target zone ? A. is another term for a policy of fixed exchange rates. ? B. suffers from none of the credibility problems associated with a fixed exchange rate. ? C. is the geographic area within which labor mobility is sufficient to justify the use of a common currency. ? D. is a range of permitted exchange rate variation between two exchange rate bands that the central bank defends by intervening in the foreign exchange market. ?19. Which of the following exchange rate regimes provides the greatest ability to pursue a monetary policy that is independent of the actions of monetary authorities in the rest of the world? ? A. floating exchange rates ? B. fixed exchange rates ? C. a monetary union ? D. a target zones ?20. Within an exchange rate target zone, the movement of the exchange rate in response to the monetary growth rate takes the form of ? A. a straight line. ? B. an S-shape curve. ? C. a parabolic function. ? D. a logarithmic function. ?21. In a target exchange rate zone, movements in the nominal exchange rate are affected by expectations among foreign exchange traders. These expectations lead the exchange rate to ? A. be more responsive to monetary growth rates than it would be under a pure floating exchange rate system. ? B. be less responsive to monetary growth rates than it would be under a pure floating exchange rate system. ? C. increase one-for-one with changes in monetary growth rates. ? D. be unaffected by changes in monetary growth rates. ?22. Which of the following is a possible reason that exchange rate movements within target zones do not appear to follow the hypothesized S-shaped curve? ? A. immobile labor ? B. perfect capital mobility ? C. imperfect policy credibility ? D. the presence of asymmetric shocks