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macro-assignment

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macro-assignment;Question 1: (1 point);The real interest rate is the nominal interest rate minus the rate of inflation.;(a) True;(b) False;Question 2: (1 point);An appreciation of the Canadian dollar means that it becomes less expensive for Canadians to buy foreign currencies such as U.S. dollars and French francs.;(a) True;(b) False;Question 3: (1 point);Consider a world with only two countries, A and B, and only two goods X and Y. Then, if country A has a comparative advantage in good X, country B must have a comparative advantage in good Y.;(a) True;(b) False;Question 4: (1 point);When chartered banks repay their borrowings from the Bank of Canada, the result is an increase in their excess reserves.;(a) True;(b) False;Question 5: (1 point);Consider a chartered bank which is one of many banks in the chartered banking system. Suppose that bank keeps a desired reserve ratio of 10% and the Bank of Canada purchases a $1 million Treasury bill from a chartered bank. As a consequence, that chartered bank will be able to safely lend a maximum of $900,000.;(a) True;(b) False;Question 6: (1 point);If with one unit of resources region A can make more of product X than a similar unit in region B, region A is said to have a comparative advantage over B in the production of X.;(a) True;(b) False;Question 7: (1 point);The flatter is the investment curve, the more effective is monetary policy as a way of controlling aggregate demand.;(a) True;(b) False;Question 8: (1 point);When the British buy German cars, this creates a demand for pounds.;(a) True;(b) False;Question 9: (1 point);Output per worker Clothing Food;in Canada 10 8;in Britain 2 4;In the above Table, Britain has an absolute advantage in both goods.;(a) True;(b) False;Question 10: (1 point);Economies of scale are the primary reason why coffee is grown in Brazil rather than British Columbia.;(a) True;(b) False;Question 11: (9 points);For the following table calculate the government surplus/deficit at each year and calculate the total government debt. (Ensure you use negative signs where appropriate when entering your answers);Year;Taxes;Government Spending;Surplus/ Deficit (-);Cumulative Government Debt;(Don't use negative sign);1;60;110;2;70;130;3;80;140;4;90;145;5;100;155;Question 12: (1 point);Fill in the blanks;Indicate whether the following policy statement is Fiscal or Monetary or Neither;Eliminate accelerated write offs on research and development;Question 13: (1 point);Fill in the blanks;Indicate whether the following policy statement is Fiscal or Monetary or Neither;Balance the budget.;Question 14: (1 point);Fill in the blanks;Indicate whether the following policy statement is Fiscal or Monetary or Neither;Increasing its deposits with the chartered banks;Question 15: (1 point);Fill in the blanks;Indicate whether the following policy statement is Fiscal or Monetary or Neither;Increase the bank rate;Question 16: (1 point);Fill in the blanks;Indicate whether the following policy statement is Fiscal or Monetary or Neither;Decrease grants to universities;Question 17: (1 point);Fill in the blanks;Indicate whether the following policy statement is Fiscal or Monetary or Neither;Government allocates budget money to build interprovincial highway.;Question 18: (8 points);Using the data in the table below, answer the following questions. (Hint: draw a graph when possible);Interest Rate%;Money Demand;(billions of dollars);20;100;19;120;18;140;17;160;16;200;15;260;14;320;13;400;12;500;Assume that the money supply is equal to 160;Part 1: What is the equilibrium rate of interest?;Part 2: Assume that the Bank of Canada buys bonds and increases the money supply to 320 What is the equilibrium rate of interest?;Part 3: A fall in income causes the demand for money to __________ by 60 billion. If the money supply is 80, what is the equilibrium rate of interest?;Part 4: Assuming the change in part 3, if money supply is 340, what is the equilibrium rate of interest?;Part 5: An increase in income causes the transaction demand for money to __________ by 40 billion at each interest rate. (Assume the change in part 3 did not occur. Given a money supply of 160, what is the equilibrium rate of interest?;Part 6: Given the change in part 5, if money supply is 300, what is the equilibrium rate of interest?;Question 19: (15 points);The balance sheet below shows the effect of a new 1,400 deposit in Bank A. Assume that the commercial banks have established a 12 percent desired reserve and that no bank holds excess reserves.;BANK A;Assets;Liabilities;Reserves 1,400;Deposits 1,400;Loans 0;Assume that Bank A lends its excess reserves to Mr. Jones who spends the proceeds of the loan. Show Bank A's new balance sheet;BANK A;Assets;Liabilities;Reserves;Deposits;Loans;The money Mr. Jones borrows is deposited in Bank B. Bank B lends its excess reserves to Mr. Smith. Show Bank B's balance sheet after the loan has been made out.;BANK B;Assets;Liabilities;Reserves;Deposits;Loans;The money Mr. Smith borrows is deposited in Bank C. Bank C lends its excess reserves to Mr. Black. Show Bank C's balance sheet after the loan has been made out.;BANK C;Assets;Liabilities;Reserves;Deposits;Loans;The money Mr. Black borrows is deposited in Bank D. Bank D lends its excess reserves to Mr. Green. Show Bank D's balance sheet after the loan has been made out.;BANK D;Assets;Liabilities;Reserves;Deposits;Loans;If the above process continues to completion, the following totals will exist for the banking system;Part 7: Deposits;Part 8: Reserves;Part 9: Loans;Question 20: (1 point);Fill in the blanks;Opportunity Cost and Comparative Advantage can be expressed in terms of each other.;Question 21: (1 point);Fill in the blanks;For trade to take place, it is sufficient for a Country to have an absolute advantage in the production of some other commodity.;Question 22: (1 point);Fill in the blanks;An absolute advantage is a necessary condition for gains from trade.;Question 23: (1 point);Fill in the blanks;If with one unit of resources region A can make more of product X than a similar unit in region B, region A is said to have a comparative advantage over B in the production of X.;Question 24: (5 points);The following table shows how much wine and cloth can be produced in Canada and in Portugal with the same amount of resource input. (Ensure you put only the numbers, not the words 'cloth' and 'wine' when entering your answer);Wine (barrels) Cloth (meters);Canada 10 25;Portugal 40;66.666667;1. The opportunity cost of 1 barrel of wine in Canada is?;2. The opportunity cost of 1 barrel of wine in Portugal is?;3. Portugal will export wine to Canada, if 1 barrel of wine can be traded for more than how many meter(s) of cloth?;4. Canada will import wine from Portugal provided that 1 meter of cloth trades for more than how many barrel(s) of wine?;5. If the international rate of exchange is 1 wine = 1.75 cloth can the two countries trade with each other? (Enter 1 or 2: 1 = yes or 2 = no);Question 25: (1 point);Fill in the blanks;Assume the exchange rate was fixed at 1 Canadian dollar for 1 American dollar. Would the following events cause pressure on the Canadian dollar to Appreciate or Depreciate?;Many Canadians plan to vacation in Florida for the winter;Question 26: (1 point);Fill in the blanks;Assume the exchange rate was fixed at 1 Canadian dollar for 1 American dollar. Would the following events cause pressure on the Canadian dollar to Appreciate or Depreciate?;Americans suddenly develop a preference for Quebec's maple syrup;Question 27: (1 point);Fill in the blanks;Assume the exchange rate was fixed at 1 Canadian dollar for 1 American dollar. Would the following events cause pressure on the Canadian dollar to Appreciate or Depreciate?;An increase in the price level in the U.S.;Question 28: (1 point);Fill in the blanks;Assume the exchange rate was fixed at 1 Canadian dollar for 1 American dollar. Would the following events cause pressure on the Canadian dollar to Appreciate or Depreciate?;Canadians are crossing the border to purchase their new cars in the United States;Question 29: (5 points);Using the following table, calculate the missing exchange rates;Country;Currency;Price of one unit of foreign currency in Canadian dollars;Price of one Canadian dollar in terms of foreign currency;U.S.A.;Dollar;1.415;Britain;Pound;0.3575;France;Euro;0.2225;Japan;Yen;119.78;Mexico;Peso;0.017;Question 30: (1 point);Fill in the blanks;Purchase of Canadian freight and shipping services by foreigners increases;Question 31: (1 point);Fill in the blanks;Increase in foreign holdings of Canadian Treasury bills;Question 32: (1 point);Fill in the blanks;Shipments of non-monetary gold abroad;Question 33: (1 point);Fill in the blanks;Purchases of foreign goods increase;Question 34: (1 point);Fill in the blanks;Foreign direct investment in Canada increases;Question 35: (1 point);Fill in the blanks;Interest and dividends paid to Canadians by foreigners increases;Question 36: (1 point);Fill in the blanks;Canadian exports are what type of item?;Question 37: (1 point);Fill in the blanks;The record of transactions between a nation and foreign countries is called its?;Question 38: (1 point);Fill in the blanks;A transaction that typically leads to the purchase of foreign currency is recorded as a?;Question 39: (1 point);Fill in the blanks;A transaction that typically leads to the sale of foreign currency is recorded as a?;Question 40: (1 point);Fill in the blanks;Purchasing power parity;Question 41: (1 point);Fill in the blanks;When imports exceeds exports;Question 42: (1 point);Fill in the blanks;Sum of the balance on current account and the balance on the capital account is negative;Question 43: (1 point);Fill in the blanks;Exchange rate

 

Paper#28768 | Written in 18-Jul-2015

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