1. Which one of the following would be an outcome if Europe's taste for Canadian produced wine increased? The dollar would

A. appreciate, and Canadian net exports would increase

B. appreciate, but Canadian net exports would stay the same.

C. depreciate, and Canadian net exports would decrease.

D. depreciate, and Canadian net exports would increase.

2,Which one of the following is an outcome of an increase in the government budget deficit?

A. It causes the real exchange rate to depreciate

B. It reduces net capital outflow.

C. It increases net exports.

D. It increases the demand for loanable funds.

3. Suppose the inflation rate over the past 20 years has been 7% in Great Britain, 9% in Japan, and 5% in Canada. If purchasing-power parity holds, which of the following statements describes the most likely result? Over this period:

A. The pound should have risen in value compared to yen and fallen compared to the dollar

B. The value of dollar should have fallen compared to the value of the pound and yen.

C. The yen should have risen in value compared to the pound and fallen compared to the dollar.

D. The yen should have fallen in value compared to the pound and risen compared to the dollar.

4.Holding other things constant, an increase in the world interest rate increases which of the following?

Hide answer choices

A. national saving and the net capital outflow

B. domestic investment and the net capital outflow

C. national saving and domestic investment

D. national saving only

5.I f the value of a nation's imports exceeds the value of its exports, which of the following is NOT true?

Hide answer choices

A. The nation is experiencing a net outflow of capital

B. Net exports are negative

C. Domestic investment is greater than national saving.

D. GDP is less than the sum of consumption, investment, and government purchases

6. An appreciation of a nation's currency can be the result of which of the following?

Hide answer choices

A. a decrease in domestic demand for investment

B. an increase in net exports

C. a rise in national saving

D. a decrease in net exports

7. A civil war abroad causes foreign investors to seek a safe haven for their funds in Canada, leading to ___ Canadian interest rates and a ___ Canadian dollar. If we are assuming that the interst rate can change.

Hide answer choices

A. lower, stronger

B. higher, weaker

C. lower, weaker

D. higher, stronger

8. Which one of the following is an outcome of a higher world real interest rate, assuming other things are equal?

Hide answer choices

A. It increases Canadian net capital outflow

B. It decreases the quantity supplied of loanable funds from national saving.

C. It increases the quantity demanded of loanable funds for domestic investment.

D. It causes the Canadian dollar to appreciate.

9. If Canada imposes a quota on the imports of apparel produced in China: In Canada

Hide answer choices

A. Net exports will rise

B. We do not have enough information to determine Canada's Net Exports.

C. Net exports will fall.

D. Net exports will remain unchanged.