Question
1)The price level in the economy between 2014 and 2015 rose from 100 to 105. Between 2015 and 2016, the price level rose from 105
1)The price level in the economy between 2014 and 2015 rose from 100 to 105. Between 2015 and 2016, the price level rose from 105 to 110.25. How does the short-run Phillips curve predict the unemployment rate will change as a result?
a.The unemployment rate will decrease since inflation decreased.
b.The unemployment rate will decrease since inflation increased.
c.The unemployment rate will increase since inflation increased.
d.The unemployment rate would not change since there is no change in the rate of inflation.
2)The level of saving in Country A has historically been high relative to the level of domestic investment. Based on this information, which of the following statements are incorrect?
i. Country A's net foreign investment has been relatively low.
ii. Country A's net exports have been relatively low.
iii. Country A's capital inflows must be positive.
iv. Country A's public saving is smaller than its private saving.
a. i
b. i and iv
c. iii and iv
d. all of the above
3) If interest rates in Japan fall, the value of yen will ____ as foreign investors _____ their investment holdings in Japan.
a. fall; sell
b. rise; increase
c. fall; increase
d. rise; fall
4)Under the Bretton Woods system, a fixed exchange rate supported by central banks was known as a(n) ________ exchange rate; in the 1960s, this system confronted severs problems, including _______.
a. par; countries with overvalued currencies refused to devalue their currencies
b. fundamental; countries with overvalued currencies refused to devalue their currencies
c. fundamental; dollars held by foreign central banks exceeded gold reserves held by the U.S
d. par; dollars held by foreign central banks exceeded gold reserves held by the U.S
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