rose, there was a decrease in net capital outflow, there was a decrease in the supply of marks, and the real exchange rate fell.. rose, there was a decrease in net capital outflow, there
Trang 1THE INTERNATIONAL UNIVERSITY (IU) – VIETNAM NATIONAL UNIVERSITY – HCMC
FINAL EXAM – TEST A
Date: August, 2014 Duration: 120 minutes
Name : Student ID:
SUBJECT: MICROECONOMICS
Dean of School of Business
Signature:
Full name:
Lecturer
Signature:
Full name: Dr Tu Van Binh
GENERAL INSTRUCTION(S)
1 This is a half opened book examination (Students are allowed to bring one A4 page (both sizes)
of handwriting in the exam room)
2 No talking during the exam
3 No cell phone, laptop and PDAs are used during the exam
4 No dictionary.
5 This exam includes two parts.
Trang 2ANSWER SHEET Note:
Selected Unselected Reselected
Stick ONLY ONE answer for each question
Trang 31 Which of the following is a major source of inflation in Vietnam?
a faster growth of the money supply than growth in GDP
b monopoly power
c low productivity
d government regulation
2 If a government supplies more money than the quantity people want to hold
a spending will decrease and the price level will fall
b spending will increase and the price level will rise.
c spending will remain constant but the price level will rise
d there will be no change in the level of economic activity or prices; money is neutral
3 The inflation tax is
a a tax on windfall profits
b a special tax imposed on owners of shares of stock
c a special tax imposed on profits when inflation is over 10% per year
d the loss incurred when inflation reduces the purchasing power of money
4 The beneficiaries of the inflation tax are
a those who borrow money
b all corporations
c all multinational corporations that can shift assets into alternative currencies
d exporters of goods and services
5 The supply of foreign exchange is
a determined by the real exchange rate
b independent of the real exchange rate.
c determined by central bankers
d determined by the President
6 The exchange rate is the
a value of money
b quantity of dollars, yen, etc., that are traded on currency markets
c amount of foreign currency that is used to buy goods made in your country
d number of units of a foreign currency that can be bought with one unit of your own currency
7 Currencies depreciate and appreciate all the time Who gains and who loses when the Vietnam Dong depreciates?
a Americans holding VN Dong gain, U.S tourists to Vietnam lose
b U.S exporters to Vietnam gain, Vietnamese holding US Dollars lose
c Vietnamese exporters gain, Vietnames importers lose.
d Vietnames importers gain, Vietnames exporters lose
8 When Italy devalues its currency
a the dollars per Italian lira will increase
b the drain of U.S reserves on Italian lira will fall
c U.S exports to Italy will increase
d the price of imported Italian olive oil in the United States will fall
Trang 49 When fewer U.S dollars are needed to buy a unit of Japanese yen, the dollar
a is devalued
b is inflated
c appreciates.
d depreciates
10.If one country has a lower inflation rate than other countries, its
a currency tends to appreciate
b currency tends to depreciate
c real interest rate will be higher than in other countries
d nominal interest rate will be higher than in other countries
11.In the long run, exchange rates
a are determined by business cycle fluctuations
b are determined by movements of Eurodollars
c will adjust until the price of a bundle of goods is the same in both countries
d will reflect economic fluctuations in both countries
12.If you were told that the exchange rate was 1.5 U.S dollars per 1 Canadian dollar (CDN), that would mean that Canadians would have to spend to by a $12 watch in New York City
a $18 CDN
b $15 CDN
c $1.5 CDN
d $12 CDN
13.8 Studies of money demand indicate that the nominal demand for money
a does not depend on interest rates
b does not depend on the price level
c is proportional to the price level
d is proportional to the nominal interest rate
14.In 1985, the U.S government indexed the federal personal income tax system With indexing, households are pushed into a higher tax bracket only if their nominal income
a rises as fast as the rate of inflation
b rises slower than the rate of inflation
c rises faster than the rate of inflation
d decreases by the amount of inflation
15.Investors criticize the federal income tax system because they must pay taxes
a on gains that merely reflect the effects of inflation
b only on gains that exceed the effects of inflation
c on losses as well as gains
d on losses but not on gains
16.Which of the following would be classified as a direct foreign investment?
a a purchase of 100 shares of British Petroleum stock
b a loan of $1 million to a Brazilian utilities firm
c a loan of $1 million from the World Bank to Vietnam
d building a new Pizza Hut in HCM City, Vietnam
17.12 Net capital outflow measures
a the flow of goods and services between countries
Trang 5b the flow of assets between countries.
c government budget surpluses and deficits relative to those experienced in other countries
d the amount of physical capital built in foreign countries
18.13 U.S trade deficits are a sign of
a reduced national savings
b reduced production of manufactured goods
c an over reliance on the service economy
d high rates of unemployment in the U.S economy
19.After reunification, Germany experienced a tremendous increase in the demand for loanable funds as many rebuilding projects were initiated As a result, interest rates
a rose, there was a decrease in net capital outflow, there was a decrease in the supply of marks, and the real exchange rate fell
b rose, there was a decrease in net capital outflow, there was a decrease in the supply of marks, and the real exchange rate rose
c fell, there was an increase in net capital outflow, there was a decrease in the supply of marks, and the real exchange rate rose
d fell, there was an increase in net capital outflow, there was an increase in the supply of marks, and the real exchange rate fell
20.Japan has historically had a high savings rate relative to other countries This means that the
a supply of loanable funds is larger, interest rates are lower, and net capital outflow is higher
b supply of loanable funds is smaller, interest rates are lower, and net capital outflow is higher
c demand for loanable funds is larger, interest rates are lower, and net capital outflow is higher
d government must subsidize production in order to encourage international trade
21.Gaussland has net exports of $400 million and buys $300 million of goods from overseas Gaussland has
a $700 million of imports, and $700 million of exports
b $300 million of imports, and $700 million of exports.
c $300 million of imports, and $400 million of exports
d None of the above are correct
22 In the second quarter of 2000, U.S net exports were about -$380 billion and imports were about $1,380 billion Therefore, exports were about
a $1,720 billion
b $1,000 billion.
c $340 billion
d None of the above are correct
23 A country sells more to people overseas than it buys from them It has
a a trade surplus and positive net exports.
b a trade surplus and negative net exports
c a trade deficit and positive net exports
d a trade deficit and negative net exports
24 International trade
a lowers the standard of living in all trading countries
Trang 6b leaves the standard of living unchanged.
c raises the standard of living for importing countries and lowers it for exporting countries
d can raise the standard of living in all trading countries.
25 Exports are
a domestic stocks and bonds sold abroad
b foreign stocks and bonds sold domestically
c foreign-produced goods and services sold domestically
d None of the above are correct.
26 Imports are
a domestic stocks and bonds sold abroad
b foreign stocks and bonds sold domestically
c domestically produced goods and services sold abroad
d foreign-produced goods and services sold domestically.
27 The trade balance
a must be zero
b must be greater than zero
c can be less than, greater than or equal to zero.
d None of the above are correct
28 If exports are less than imports, the trade balance
a is in deficit.
b is balanced
c is in surplus
d cannot be determined from this information alone
29 An open economy's GDP is given by
a Y = C + I + G + S
b Y = C + I + G + NX.
c Y = C + I + G
d Y = C + I + G + T
30 Which of the following factors affects a country's net foreign investment?
a real interest rates paid on foreign assets
b the perceived economic and political risks of holding assets abroad
c government policies that affect foreign ownership of domestic assets
d All of the above are correct.
Trang 731 The open-economy macroeconomic model takes
a GDP as given
b the price level as given
c Both a and b are correct.
d None of the above are correct
32 In the open-economy macroeconomic model, the supply of loanable funds comes from
a national saving.
b foreign saving
c domestic investment
d the sum of domestic investment and net foreign investment
33 A higher real interest rate raises the quantity of
a loanable funds demanded
b loanable funds supplied.
c domestic investment
d net foreign investment
34 A fall in the real interest rate
a encourages investment and so increases the quantity of loanable funds demanded.
b encourages investment and so decreases the quantity of loanable funds demanded
c discourages investment and so increases the quantity of loanable funds demanded
d discourages investment and so decreases the quantity of loanable funds demanded
35 In the figure shown, if the real interest rate is 3 percent, there will be
a equilibrium
b a shortage of 25
c a shortage of 50.
d None of the above are correct
36 Net foreign investment = net exports implies that
a national saving equals domestic investment
b the volume of exports equals the volume of imports
c the supply of dollars equals the demand for dollars in the foreign-currency exchange market.
Trang 8d All of the above are correct.
37 The price that balances supply and demand in the market for foreign-currency exchange is the
a real exchange rate.
b real interest rate
c nominal exchange rate
d nominal interest rate
38 According to theory of purchasing-power parity, a person should be able to purchase
a The same amount of foreign currency with a dollar whatever country they travel to
b The same amount of goods with a dollar whatever country they travel to.
c Both a and b are correct
d None of the above are correct
39 Suppose that the U.S imposes an import quota on Vietnamese Catfish The quota makes the real exchange rate of U.S dollars
a appreciate and the real interest rate in the U.S increase
b depreciate and the real interest rate in the U.S decrease
c appreciate but does not change the real interest rate in the U.S.
d depreciate but does not change the real interest rate in the U.S
40 Trade policies that directly affect a country’s exports or imports have no effect on that
country’s
a net foreign investment
b real interest rates
c national saving
d Trade policies have no effect on any of the above.
41 During recessions
a firms may find they are unable to sell all they produce
b workers are laid off
c factories are idle
d All of the above are correct.
42 Most economists use the aggregate demand and aggregate supply model primarily to analyze
a fluctuations in the economy.
b the bond and money markets
c the long-run effects of international trade
d the demand for particular products such as automobiles
43 Real GDP
a is not adjusted for inflation
b not measures income
c moves in the same direction as unemployment
d None of the above are correct.
44 The classical dichotomy refers to the separation of
a real and nominal variables.
b changes in money and changes in government expenditures
c endogenous and exogenous variables
d business cycle and other variables
45 According to classical economic theory, changes in the money supply
Trang 9a affect nominal variables and real variables.
b affect nominal variables, but not real variables.
c affect exogenous variables, but not endogenous variables
d affect real variables, but not nominal variables
46 Which of the following shows the total quantity of goods and services that people throughout the economy want to sell?
a the aggregate demand curve
b the market demand curve
c the aggregate supply curve
d the market supply curve
47 The downward slope of the aggregate demand curve shows that an increase in the
a money supply causes the aggregate quantity of goods and services demanded to increase
b money supply causes the aggregate quantity of goods and services demanded to decrease
c price level causes the aggregate quantity of goods and services demanded to increase
d price level causes the aggregate quantity of goods and services demanded to decrease.
48 Aggregate demand shifts right when the government
a raises personal income taxes
b increases the money supply.
c repeals an investment tax credit
d All of the above are correct
49 The aggregate supply curve is vertical
a in the short and long run
b in neither the short nor long run
c in the long run, but not the short run.
d in the short run, but not the long run
50 The sticky wage theory of the short-run aggregate supply curve says that when the price level rises more than expected, the real wage
a rises, so employment rises
b rises, so employment falls
c falls, so employment rises.
d falls, so employment falls
51 Aggregate demand is affected by
a monetary and fiscal policy
b spending by households and firms
c Both of the above are correct.
d None of the above are correct
52 Policymakers might try to offset the changes created by a change in household spending by changing
a government expenditures
b the money supply
c Changing either of the above.
d Changing neither of the above
53 Which of the following is not a reason the aggregate demand curve slopes downward? As the price level increases
Trang 10a real wages decline.
b real wealth declines
c the interest rate increases
d the exchange rate increases
54 Liquidity preference refers directly to Keynes’s theory concerning
a an explanation for sticky wages and prices
b an explanation for the existence of foreign trade
c the effects of changes in money demand and supply on interest rates.
d the effects of changes in money demand and supply on exchange rates
55 If expected inflation is increase, then when the nominal interest rate increases, the real interest rate
a increases
b decreases
c is unchanged
d might do any of the above.
56 According to the theory of liquidity preference, the money supply is
a independent of the interest rate.
b positively related to the interest rate
c negatively related to the interest rate
d positively related to the interest rate at low interest rates, and negatively related at higher rates
57 Assume the money market is initially in equilibrium If the price level decreases, according to liquidity preference theory there is
a excess supply of money until the interest rate increases
b excess supply of money until the interest rate decreases.
c excess demand for money until the interest rate increases
d excess demand for money until the interest rate decreases
58 An increase in the MPC
a increases the multiplier, so that changes in government expenditures have a larger effect on aggregate demand.
b increases the multiplier, so that changes in government expenditures have a smaller effect
on aggregate demand
c decreases the multiplier, so that changes in government expenditures have a larger effect
on aggregate demand
d decreases the multiplier, so that changes in government expenditures have a smaller effect
on aggregate demand
59 Friedman and Phelps argued that
a Classical theory was flawed, so there was a logical explanation for a long-run tradeoff between inflation and unemployment
b there was neither a short-run nor long-run tradeoff between inflation and unemployment
c in the long run, monetary growth did not influence those factors that determine the economy’s unemployment rate.
d the Phillips curve could be exploited in the long run by using monetary, but not fiscal policy
Most economists believe that a tradeoff between inflation and unemployment exists