13) When considering the trend of an exchange rate over the period of 10-15 years, economist would expect the following variables to be important in explaining this trend

Select one:

a.Relative rates of productivity growth across countries

b.Relative price levels across countries

c.Preferences for domestic and foreign goods across countries

d.All of these answers are correct

14) Suppose Australian dollar decreases in value relative to other currencies. One would expect to the following in the Australian economy

Select one:

a.none of the answers is correct

b.decrease in exports.

c.growth rate of GDP to decrease.

d.increase imports.

15) Because of lower investment in basic research, the technological change in Australian economy slows down. As a result

Select one:

a.the economy will move down along the long-run aggregate supply curve.

b.the long-run aggregate supply curve will shift to the left.

c.the short-run aggregate supply curve will shift to the right.

d.the economy will move up along the long-run aggregate supply curve.

16) When interest rates in Australia decrease relative to interest rates in other countries, we may see Australian dollar

Select one:

a.appreciation and an increase in net exports.

b.depreciation and an increase in net exports.

c.appreciation and a decrease in net exports.

d.depreciation and a decrease in net exports.

17) After the cash rate increase by the RBA, we can expect to observe

Select one:

a.increase in the interest rates charged by the commercial banks, which slows consumption spending.

b.exchange rate appreciation if the increase was unexpected by the market

c.increase in the interest rates in the market for loanable funds, which reduces investment spending.

d.all answers are correct

18)To stimulate the economy Australian government buys more of the Australian made submarines. How will this affect the aggregate demand curve?

Select one:

a.This will shift the aggregate demand curve to the right.

b.This will move the economy down along a stationary aggregate demand curve.

c.This will move the economy up along a stationary aggregate demand curve.

d.This will move the economy up along a stationary short run aggregate supply curve.