Question 1

The United States SRAS curve may shift to the left if we ____________________ Malaysia and the dollar ________________ against the Malaysian ringgit.

Accepted Answer

If the US buys raw materials from Malaysia, an appreciation of the dollar against the Malaysian ringgit would make those imports cheaper, causing a decrease in production costs and an increase in supply. This, in turn, would shift the SRAS curve to the right, not to the left. On the other hand, if the dollar depreciates against the ringgit, imports become more expensive, production costs rise, and the SRAS curve shifts to the left. Therefore, option B is the correct choice.

Question 2

A fall in the price of foreign inputs leads to a

Accepted Answer

A fall in the price of foreign inputs would reduce the costs of production for domestic firms, leading to an increase in aggregate supply. This would cause a rightward shift of the SRAS (short-run aggregate supply) curve.

Question 3

Dollar depreciation lowers United States Real GDP when the _____________ shift of the SRAS curve exceeds the __________ shift of the AD curve.

Accepted Answer

Dollar depreciation will lead to an increase in the price of imported inputs, leading to a decrease in the supply of goods and services in the short run. This will cause a leftward shift of the SRAS curve. On the other hand, dollar depreciation will lead to an increase in net exports, which will increase aggregate demand and cause a rightward shift of the AD curve. If the leftward shift of the SRAS curve exceeds the rightward shift of the AD curve, it will result in a decrease in Real GDP. Therefore, the correct answer is C.

Question 4

A rise in the price of foreign inputs leads to a

Accepted Answer

A rise in the price of foreign inputs increases the costs of production for firms, causing a leftward shift of the SRAS (short-run aggregate supply) curve. This is because firms will need to increase their prices in order to cover the higher costs, leading to a reduction in the quantity of output supplied at any given price level. This shift in the SRAS curve leads to higher prices and lower output levels in the short-run.

Question 5

Suppose the price level in Germany rises,ceteris paribus.This ________________ United States net exports,ultimately shifting the United States AD curve ____________________.

Accepted Answer

The answer of Suppose the price level in Germany rises,ceteris...

Question 6

The United States SRAS curve may shift to the right if we ____________________ Malaysia and the dollar ________________ against the Malaysian ringgit.

Accepted Answer

The answer of The United States SRAS curve may shift...

Question 7

In the short run following a depreciation of the dollar,the United States may move downward along the J-curve since it is likely that the United States

Accepted Answer

Following the depreciation of the dollar, the US will have to spend more dollars on imports, as the cost of imports will increase due to the weaker value of the dollar. This will cause a temporary worsening of the balance of trade, leading to a short-term decrease in exports and increase in imports, causing the US to move downward along the J-curve.

Question 8

As the dollar depreciates,the dollar price of imported goods _________,ultimately shifting the United States AD curve __________________.

Accepted Answer

The answer of As the dollar depreciates,the dollar price of...

Question 9

Suppose we import only one good from Germany: cars.Initially,the exchange rate is $0.60 per euro.We import 150,000 cars annually,priced at 70,000 euros each.Then the euro rises to $0.625.Assuming the dollar value of our exports to Germany remains constant,we will stop moving down the J-curve and "turn the corner" to move upward along it once we import ______________ German cars per year.

Accepted Answer

The answer of Suppose we import only one good from...

Question 10

As the dollar depreciates,the foreign price of United States goods _________________,ultimately shifting the United States AD curve _____________.

Accepted Answer

The answer of As the dollar depreciates,the foreign price of...

Question 11

Suppose United States net exports are -$50 billion.Then the dollar depreciates.In the short run,the United States may move downward along the J-curve,with net exports _________ and the AD curve shifting to the _______________.

Accepted Answer

The answer of Suppose United States net exports are -$50...

Question 12

As the dollar appreciates,the dollar price of imported goods ___________ ultimately shifting the United States AD curve to the _______________.

Accepted Answer

The answer of As the dollar appreciates,the dollar price of...

Question 13

Suppose the supply of Malaysian rubber increases.If U.S.producers purchase this rubber,in the United States,this would cause a

Accepted Answer

An increase in the supply of Malaysian rubber would lead to a decrease in its price, making it cheaper for U.S. producers to purchase. This would decrease production costs for U.S. firms, causing a rightward shift of the SRAS (short-run aggregate supply) curve. This is because, with lower production costs, firms would be willing to produce more output at every given price level. Therefore, a rightward shift in the SRAS curve would lead to lower prices and higher output levels, resulting in a rightward shift of the AD (aggregate demand) curve.

Question 14

As the dollar appreciates,the foreign price of United States goods ______________,ultimately shifting the United States AD curve ________________.

Accepted Answer

The answer of As the dollar appreciates,the foreign price of...

Question 15

When the United States moves upward along the J-curve,it is because a depreciation of the dollar is having the _____________ effect of _____________ the number of dollars spent on imports.

Accepted Answer

When the United States experiences a depreciation of the dollar, it means that the value of the dollar has fallen relative to other currencies. This makes imports more expensive, which generally leads to a reduction in the number of dollars spent on imports. This effect takes time to materialize fully, which is why it is associated with the long-run response along the J-curve.

Question 16

Can a change in the Japanese price level cause the United States to move downward along its J-curve?

Accepted Answer

The answer of Can a change in the Japanese price...

Question 17

Suppose the supply of Malaysian rubber decreases.If U.S.producers purchase this rubber,in the United States,this would cause a

Accepted Answer

A decrease in the supply of Malaysian rubber would increase the price of raw materials for US producers who use Malaysian rubber. This would cause the cost of production to increase and lead to a leftward shift of the SRAS (short-run aggregate supply) curve in the United States.

Question 18

When the United States is moving downward along the J-curve,its trade balance is ______________ as an immediate after-effect of a____________________ of the dollar.

Accepted Answer

When a country is moving downward along the J-curve, the trade balance tends to worsen initially as the currency depreciates. Therefore, the correct choice is (C) worsening; depreciation.

Question 19

Dollar depreciation raises United States Real GDP when the __________ shift of the AD curve exceeds the _________________ shift of the SRAS curve.

Accepted Answer

Dollar depreciation shifts the AD curve rightward, as exports become cheaper and foreign goods become relatively more expensive for American consumers. However, this can also lead to an upward pressure on prices due to increased demand and potential supply chain disruptions. Therefore, the degree to which real GDP increases will depend on the magnitude of the AD shift in comparison to the SRAS shift. If the SRAS curve shifts leftward due to increased input costs, wage pressures, or other factors, it could mitigate some of the expansionary effect of the AD shift on real output. Hence, the AD curve must shift rightward more than the SRAS curve shifts leftward in order for dollar depreciation to raise real GDP.

Question 20

Suppose the price level in Germany falls,ceteris paribus.This _________________ United States net exports,ultimately shifting the United States AD curve __________________.

Accepted Answer

The answer of Suppose the price level in Germany falls,ceteris...

Quiz 24: Globalization and International Impacts on the Economy

The United States SRAS curve may shift to the left if we ____ Malaysia and the dollar against the Malaysian ringgit.

A fall in the price of foreign inputs leads to a

Dollar depreciation lowers United States Real GDP when the ___ shift of the SRAS curve exceeds the shift of the AD curve.

A rise in the price of foreign inputs leads to a

Suppose the price level in Germany rises,ceteris paribus.This United States net exports,ultimately shifting the United States AD curve ____.

The United States SRAS curve may shift to the right if we ____ Malaysia and the dollar against the Malaysian ringgit.

In the short run following a depreciation of the dollar,the United States may move downward along the J-curve since it is likely that the United States

As the dollar depreciates,the dollar price of imported goods _,ultimately shifting the United States AD curve __________.

As the dollar depreciates,the foreign price of United States goods _____,ultimately shifting the United States AD curve _.

Suppose United States net exports are -$50 billion.Then the dollar depreciates.In the short run,the United States may move downward along the J-curve,with net exports _ and the AD curve shifting to the _______.

As the dollar appreciates,the dollar price of imported goods _ ultimately shifting the United States AD curve to the _____.

Suppose the supply of Malaysian rubber increases.If U.S.producers purchase this rubber,in the United States,this would cause a

As the dollar appreciates,the foreign price of United States goods ,ultimately shifting the United States AD curve __.

When the United States moves upward along the J-curve,it is because a depreciation of the dollar is having the _ effect of _ the number of dollars spent on imports.

Can a change in the Japanese price level cause the United States to move downward along its J-curve?

Suppose the supply of Malaysian rubber decreases.If U.S.producers purchase this rubber,in the United States,this would cause a

When the United States is moving downward along the J-curve,its trade balance is as an immediate after-effect of a______ of the dollar.

Dollar depreciation raises United States Real GDP when the shift of the AD curve exceeds the _______ shift of the SRAS curve.

Suppose the price level in Germany falls,ceteris paribus.This _ United States net exports,ultimately shifting the United States AD curve __.