1- US government bonds are long considered safe between heaven assets. In times of crisis, many multinational financial institutions will buy US government bonds, such action will cause.

A-The US dollar to appreciate against other currencies

B- The US dollar to depreciate against other currencies

C- The US money supply increases

2-The US is currently running a trade deficit with other countries. The government can correct this situation by:

I. Contractionary fiscal policy (decreases in government spending or increases in taxes)

II. Expansionary monetary policy (increases in money supply)

III. Imposing tariffs and increase money supply

IV. Contractionary monetary policy

A- III only

B- I only

C- IV only

D- I and IV only

3- Country A imposes 20% tariffs on imports from Country B. Country B's government can reduce the effect of the tariffs by:

I. devaluate its currency by 20%

II. subsidize exporters that export to Country A

III. pay the tariffs to Country A

A- I and II only

B- I and II and III

C- I only

4- Which of the following can worsen the trade balance between the US and other countries

I. When US citizens visit other countries

II. When French tourist come visit the US

III. When German investors buy homes in the US

IV. When US citizens buy an Apple product

A- II and III only

B- I and IV only

C- IV only

5- Why purchasing power parity (PPP) usually won't work?

I. Because some good and services are not trade-able

II. The cost of arbitrage could be too high

III. Not all currencies are convertible

A- I only

B- I and II and III

C- III only

6- Country A can produce 300 units of bread and 150 units of peanut butter. Country B can produce 400 units of bread and 200 units of peanut butter. Which of the following is true?

I. Country B has an absolute advantage on both products

II. There will be no benefits to trade with each other

III. The price of peanut butter in terms of bread is the same for both countries

A- I only

B- I and II and III

C- II only

7- Cryptocurrencies such as Bitcoin cannot fulfill which of the following concepts of money

I. Store of value

II. Medium of transfer

III. Unit of accounting

A- I and II and III

B- II and III

C - III only

8- From 1600s to Early 1800s> Great Britain was running a huge trade deficit with China (until they realized they can sell opium to get the Chinese addicted and reversed the trade balance) Since the world was under commodity money system at that time, gold and silver was flowing from ____________ to ____________ and price un China had _____________ while price in Great Britain had ____________

A- China, Great Britain, decrease, increase

B- Great Britain, China, increase, decrease

C- Great Britain, China, decrease, increase

D- China Great Britain, increase, decrease