* not completed

. Macroeconomic data that are adjusted to reflect national variations in local prices of goods and services are known as what?

Balance of payments data correct incorrect

Purchasing power parity-based data correct incorrect

Gross domestic product data correct incorrect

Industrial output data correct incorrect

* not completed

. An economic system in which individuals and private firms, rather than governments, make the majority of economic decisions is known as what?

A command economy correct incorrect

A transition economy correct incorrect

A free market economy correct incorrect

A socialist economy correct incorrect

* not completed

. Which of the following is NOT a typical response of a national government for dealing with a persistent trade deficit?

Increasing corporate tax rates correct incorrect

Devaluing its currency correct incorrect

Expanding export promotion schemes correct incorrect

Raising import barriers correct incorrect

* not completed

. Which of the following is a typical consequence of an extended period of rising inflation in a country?

Decreases in factor input costs correct incorrect

Increased purchasing power of consumers correct incorrect

Increasing inflows of foreign direct investment correct incorrect

Rising interest rates and the cost of borrowing correct incorrect

* not completed

. A foreign exchange rate that is agreed between two parties for immediate settlement is known as what?

Spot exchange rate correct incorrect

Forward exchange rate correct incorrect

Fixed exchange rate correct incorrect

Real exchange rate correct incorrect

* not completed

. If Country A's nominal exchange depreciates against that of Country B while its real exchange rate against Country B appreciates, then:

Country A has gained competitiveness relative to Country B. correct incorrect

Country A has lost competitiveness relative to Country B. correct incorrect

There is no change in Country A's competitiveness. correct incorrect

There is insufficient information to know the answer. correct incorrect

* not completed

. Which of the following statements about exchange rates is true?

A fixed exchange rate good for businesses. correct incorrect

A floating exchange rate may be highly volatile and therefore increases uncertainty for businesses. correct incorrect

A fixed exchange rate is, to some extent, predictable and therefore good for businesses. correct incorrect

All of the above. correct incorrect

* not completed

. Which of the following statements about exchange rates is true?

Using a currency peg generally ensures that the real exchange rate generally remains constant. correct incorrect

Using a crawling peg generally ensures that the real exchange rate generally remains constant. correct incorrect

Using a fixed exchange rate generally ensures that the real exchange rate generally remains constant. correct incorrect

Using a 'dirty' float generally ensures that the real exchange rate generally remains constant. correct incorrect

* not completed

. What is the principal justification for countries to use a system of multiple exchange rates?

To save scarce foreign exchange. correct incorrect

To maximise foreign exchange earnings. correct incorrect

To make exports more competitive. correct incorrect

To reduce imports. correct incorrect

* not completed

. If Country A has inflation of 17.5% and Country B 2.5%, in order to maintain a constant real exchange rate, the currency of Country A relative to that of Country B should:

Depreciate by 15.0%. correct incorrect

Depreciate by 14.6 %. correct incorrect

Appreciate by 15.0%. correct incorrect

Appreciate by 14.6%. correct incorrect