Chapter 19 & 21

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10 points

G7 represents the seven major countries of the world.

True

False

10 points

The September 1992 EMS (European Monetary System) Crisis was the belief that several countries were soon going to devaluate. Some countries defended themselves by increasing the overnight interest rate by up to 500%.

True

False

10 points

Z=C+I+G-IM+X IS THE EQUATION FOR

domestic demand for goods

domestic demand for domestic goods

demand for domestic goods

demand for all goods

10 points

What must be done for the import number to be correct before completing the equation?

the dollar has to be checked for inflation

nothing

The real exchange rate must be assessed

the treasury department must print more money

10 points

What is the demand for domestic goods assuming the exchange rate has already been solved for:
C=200
I=50
G=150
IM=20
x=350

730

770

10 points

What is the domestic demand for goods?
C=200
I=50
G=150
IM=20
x=350

730

This cannot be solved

400

380

10 points

This equation means that the US economy is doing well because of the exports/imports.
C=200
I=50
G=150
IM=20
x=350

True

False

10 points

C+I+G refers to the

the American/domestic portion of the equation

the exchange rate

the domestic economy fiscal policy

macroeconomic equation for testing the market

10 points

The ________________was a system in which each country fixed the price of its currency in terms of gold. This system implied fixed nominal exchange rates between countries.

Diamond standard

G7 standard

Gold standard

Platinum standard

10.

10 points

The Marshall-Lerner condition is the condition under which a real depreciation (a decrease in ) leads to an increase in net imports.

True

False

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