Oxford University Press - Online Resource Centres

King: Economics

Chapter 28

Instructions

Answer the following questions and then press 'Submit' to get your score.

Question 1

Which of the following statements about the UK balance of payments accounts is false?

Question 2

Suppose that one year a country had a balance of trade deficit. Suppose also that the balance for wages, investment income and current transfers was zero. Then which of the following statements is false?

Question 3

Which of the following statements is true?

1. The supply curve for sterling on the foreign exchange markets must slope upwards to the right.
2. The demand curve for sterling on the foreign exchange markets must slope downwards to the right.

Question 4

Which of the following would cause sterling to depreciate against the US dollar, other things being equal?

Question 5

Which of the following exchange rate regimes best describes the situation for both sterling and the euro?

Question 6

Which of the following statements is false?

Question 7

Suppose a country has a floating exchange rate and no capital controls. It also has a recessionary gap. It tackles this with an expansionary monetary policy. In the final equilibrium people expect its exchange rate to stay at its new value. Which of the following statements is false?

Question 8

Suppose a country has a floating exchange rate and no capital controls. It also has a recessionary gap. It tackles this with an expansionary fiscal policy. In the final equilibrium people expect its exchange rate to stay at its new value. Which of the following statements is false?

Question 9

Which of the following statements is false?

Question 10

There are several reasons why the UK government would be cautious about joining the euro. Which of the following is not one of these reasons?