International Macroeconomics
Test Preparation
Course Introduction
International Macroeconomics explores the broad economic interactions among countries, focusing on key topics such as exchange rates, balance of payments, international capital flows, and the impact of macroeconomic policies in an open economy. The course examines how globalization shapes economic activity and policy-making, analyzes currency crises and sovereign debt, and investigates the effects of international monetary systems on economic stability and growth. Through theoretical models and real-world case studies, students will develop a solid understanding of how international markets and cross-border linkages influence national economies and global economic trends.
Recommended Textbook
Macroeconomics 4th Australian Edition by Glenn Hubbard
Available Study Resources on Quizplus
15 Chapters
2116 Verified Questions
2116 Flashcards
Source URL: https://quizplus.com/study-set/1419
Page 2
Chapter 1: Economics: Foundations and Models
Available Study Resources on Quizplus for this Chatper
160 Verified Questions
160 Flashcards
Source URL: https://quizplus.com/quiz/28152
Sample Questions
Q1) Productive efficiency is achieved when:
A)firms add a low profit margin to the goods and services they produce.
B)firms produce the goods and services that consumers value most.
C)firms produce goods and services at the lowest cost.
D)there are no shortages or surpluses in the market.
Answer: C
Q2) Voluntary exchange ________ economic efficiency because neither the buyer nor the seller would agree to a trade unless ________.
A)increases; they both benefit
B)increases; only one party benefits
C)decreases; neither benefit
D)decreases; they both benefit
Answer: A
Q3) The decision about what goods and services will be produced in a market economy is made by:
A)lawmakers in the government voting on what will be produced.
B)workers deciding to produce only what the boss says must be produced.
C)producers deciding what society wants most.
D)consumers and firms choosing which goods and services to buy or produce.
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Choices and Trade Offs in the Market
Available Study Resources on Quizplus for this Chatper
192 Verified Questions
192 Flashcards
Source URL: https://quizplus.com/quiz/28153
Sample Questions
Q1) Stella can produce either a combination of 60 silk tulips and 85 silk leaves or a combination of 70 silk tulips and 55 silk leaves. If she now produces 60 silk tulips and 85 silk leaves, what is the opportunity cost of producing an additional 10 silk tulips?
A)2.5 silk leaves.
B)10 silk leaves.
C)25 silk leaves.
D)30 silk leaves.
Answer: D
Q2) Refer to Table 2.5. What is Barney's opportunity cost of making a unicycle?
A)1/2 pogo stick
B)2 pogo sticks
C)1.75 unicycles
D)2.8 pogo sticks
Answer: B
Q3) Any output combination along a production possibility frontier is associated with fully utilised resources.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: Where Prices Come From: the Interaction of
Demand and Supply
Available Study Resources on Quizplus for this Chatper
201 Verified Questions
201 Flashcards
Source URL: https://quizplus.com/quiz/28154
Sample Questions
Q1) In June, buyers of titanium expect that the price of titanium will fall in July. What happens in the titanium market in June, holding everything else constant?
A)The demand curve shifts to the right.
B)The quantity demanded increases.
C)The quantity demanded decreases
D)The demand curve shifts to the left.
Answer: D
Q2) If a firm has an incentive to increase supply now and decrease supply in the future, the firm expects that the:
A)price of its product will be lower in the future than it is today.
B)demand for the product will be lower in the future than it is today.
C)price of inputs will be lower in the future than they are today.
D)price of its product will be higher in the future than it is today.
Answer: A
Q3) All else equal, as the price of a product falls, the quantity supplied increases.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Gdp: Measuring Total Production, Income and Economic Growth
Available Study Resources on Quizplus for this Chatper
123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/28155
Sample Questions
Q1) How is total production in the economy measured?
A)as the market value of all final goods and services produced in the economy
B)as the total number of goods and services produced in the economy
C)as the total number of services produced in the economy
D)as the total number of goods produced in the economy
Q2) In a small economy, gross investment in 2018 is $2 500, consumption spending is $6 000, net investment is $200, government spending is $1 500, exports are $2 000 and imports are $1 000. What is GDP for this economy in 2018?
A)$10 700
B)$10 300
C)$10 200
D)$11 000
Q3) What is the largest component of GDP in Australia, as measured by the 'expenditure method'?
A)net exports
B)government expenditure
C)consumption expenditure
D)investment expenditure
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Economic Growth, the Financial System and Business Cycles
Available Study Resources on Quizplus for this Chatper
132 Verified Questions
132 Flashcards
Source URL: https://quizplus.com/quiz/28156
Sample Questions
Q1) The beginning of an economic contraction coincides with a/an ________ while during an economic expansion ________
A)decrease in government spending; investment increases.
B)decrease in investment; investment increases.
C)decrease in government spending; government spending increases.
D)increase in government spending; investment decreases.
Q2) Explain and show graphically how a decrease in government spending, ceteris paribus, affects the equilibrium interest rate and equilibrium quantity of loanable funds in the market for loanable funds.
Q3) As a proportion of GDP, the Australian economy produced fewer services in the 2000s than it did in the 1950s, which has contributed to an increase in economic stability over time.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Long-Run Economic Growth: Sources and Policies
Available Study Resources on Quizplus for this Chatper
118 Verified Questions
118 Flashcards
Source URL: https://quizplus.com/quiz/28157
Sample Questions
Q1) Robert Lucas argues that there are ________ returns to human capital, and any productivity increases are not completely captured by individuals as they decide how much education to purchase. As a result, the market produces ________ education and training.
A)increasing; too much
B)decreasing; too much
C)increasing; too little
D)decreasing; too little
Q2) Which of the following is a reason why low income countries might experience economic growth?
A)The country has endured extended periods of war.
B)The country fails to enforce a rule of law.
C)The country suffers from poor health infrastructures.
D)The country has a high rate of saving and investment.
Q3) What changes are explained by an economic growth model?
A)Real GDP per capita in the long run
B)Nominal GDP per capita in the long run
C)Real GDP per capita in the short run
D)Nominal GDP per capita in the short run
Page 8
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: Unemployment
Available Study Resources on Quizplus for this Chatper
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/28158
Sample Questions
Q1) For which of the following age groups was the unemployment rate in Australia the lowest in 2016?
A)15-19 years.
B)25-34 years.
C)35-44 years.
D)65 years and older
Q2) The official unemployment rate may understate the true rate of unemployment because of:
A)increases in worker productivity over time.
B)discouraged workers who no longer actively look for work.
C)workers who have more than one job.
D)changes in the wage rates which may increase unemployment.
Q3) When is the labour market considered to be at 'full employment'?
A)When there are no unemployed workers.
B)When all unemployment is frictional or structural.
C)When all unemployment is voluntary.
D)When there are more unemployed workers than job vacancies.
Q4) Eliminating 'structural unemployment' would be good for the economy.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Inflation
Available Study Resources on Quizplus for this Chatper
110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/28159
Sample Questions
Q1) 'Demand-pull inflation' is caused by:
A)a recession.
B)high levels of aggregate demand in the short run.
C)an increase in the costs of production, which pulls prices higher.
D)wage increases that are higher than increases in productivity growth.
Q2) What is the difference between the nominal interest rate and the real interest rate?
Q3) Inflation that is ________ than what is expected benefits ________ and hurts
A)less; creditors; debtors
B)less; debtors; creditors
C)greater; creditors; debtors
D)greater; creditors; no-one
Q4) There are no costs to inflation if it is fully anticipated.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Aggregate Expenditure and Output in the Short Run
Available Study Resources on Quizplus for this Chatper
138 Verified Questions
138 Flashcards
Source URL: https://quizplus.com/quiz/28160
Sample Questions
Q1) In Figure 9.1, if the economy is at a level of aggregate expenditure given by point K:
A)the economy is in equilibrium.
B)production is greater than spending.
C)production is less than spending.
D)inventories will increase above their desired level.
Q2) On the 45° line diagram, the 45° line shows points such that:
A)real income equals real GDP.
B)real aggregate expenditure equals C + I.
C)real aggregate expenditure equals real GDP.
D)real aggregate output equals the quantity produced.
Q3) Australian net export spending falls when the:
A)price level in Australia rises relative to the price level in other countries.
B)economic growth rate of Australian GDP is more rapid than the growth rate of GDP in other countries.
C)value of Australian dollar increases relative to other currencies.
D)inflation rate is higher in Australia relative to other countries.
Q4) When aggregate expenditure is more than real GDP, inventories will increase.
A)True
B)False
Page 11
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Aggregate Demand and Aggregate Supply Analysis
Available Study Resources on Quizplus for this Chatper
134 Verified Questions
134 Flashcards
Source URL: https://quizplus.com/quiz/28161
Sample Questions
Q1) Explain whether it is possible for a long-run aggregate supply curve to shift leftwards.
Q2) According to the real business cycle model, increases in aggregate demand:
A)raise GDP.
B)lower GDP.
C)do not affect GDP.
D)lower the price level.
Q3) 'Stagflation' is often a result of:
A)a negative supply shock.
B)a decrease in aggregate demand.
C)an increase in aggregate demand.
D)an increase in aggregate supply.
Q4) An increase in disposable income will shift the aggregate demand curve to the right.
A)True
B)False
Page 12
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: Money, Banks and the Reserve Bank of Australia
Available Study Resources on Quizplus for this Chatper
123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/28162
Sample Questions
Q1) The 'quantity theory of money' argues that an increase in the money supply at a rate that is faster than the rate of increase in real GDP will lead to an increase in the price level in the long run.
A)True
B)False
Q2) If Thrifty Bank receives a $10 000 deposit and keeps 10% of its deposits in reserve, how much will the bank loan out?
A)$10 000
B)$1 000
C)$9 000
D)$11 000
Q3) List the five criteria necessary in order for a good to be suitable as a medium of exchange, and explain whether Australian currency is suitable to use as a medium of exchange.
To view all questions and flashcards with answers, click on the resource link above.
13
Chapter 12: Monetary Policy
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/28163
Sample Questions
Q1) Explain the consequences of expansionary monetary policy if the economy was close to, or at, potential GDP level.
Q2) If the Reserve Bank of Australia sells financial instruments in the open market, net exports are likely to decrease.
A)True
B)False
Q3) 'Monetary policy' targets the:
A)long-term real rate of interest.
B)long-term nominal rate of interest.
C)short-term real rate of interest.
D)short-term nominal rate of interest.
Q4) A rise in the rate of interest on financial securities will lead to a movement downward along the money demand curve.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Fiscal Policy
Available Study Resources on Quizplus for this Chatper
163 Verified Questions
163 Flashcards
Source URL: https://quizplus.com/quiz/28164
Sample Questions
Q1) What is 'contractionary fiscal policy' and under what circumstances would it be used?
Q2) Explain why accurately timing the fiscal policy may be more difficult than accurately timing of monetary policy.
Q3) Government budget deficits can lead to higher real interest rates, which will reduce private investment.
A)True
B)False
Q4) Induced taxes and transfer payments reduce the multiplier effects.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Macroeconomics in an Open Economy
Available Study Resources on Quizplus for this Chatper
141 Verified Questions
141 Flashcards
Source URL: https://quizplus.com/quiz/28165
Sample Questions
Q1) The quantity supplied of dollars is likely to ________ when the exchange rate of yen per dollar ________.
A)not change; rises
B)rise; rises
C)not change; falls
D)rise; falls
Q2) Suppose that health experts discover that French red wine lowers cholesterol. How will this affect the demand and supply of dollars in exchange for euros? Illustrate with a graph and explain. Will the dollar appreciate or depreciate?
Q3) A decrease in capital outflows from Australia will:
A)decrease the balance on the financial account.
B)increase the balance on the financial account.
C)increase the balance on the capital account.
D)decrease the balance on the current account.
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: The International Financial System
Available Study Resources on Quizplus for this Chatper
145 Verified Questions
145 Flashcards
Source URL: https://quizplus.com/quiz/28166
Sample Questions
Q1) Under the 'Bretton Woods System':
A)the United States of America pledged to buy gold at $35 an ounce.
B)the central banks of the members of the system agreed to allow their currencies to float.
C)the members of the system agreed to redeem their paper currency domestically.
D)exchange rates were floating, determined in the market.
Q2) All of the following are considered among the four most important determinants in explaining exchange rate fluctuations in the long run, except:
A)tariffs and quotas.
B)preferences for domestic and foreign goods.
C)interest rates.
D)relative rates of productivity growth across countries.
Q3) The country's exchange rate system is a(n)_________ system when a country's exchange rate is allowed to vary within a particular target zone against the currencies of other countries.
A)floating rate
B)adjustable peg
C)pegged rate
D)managed floating rate
To view all questions and flashcards with answers, click on the resource link above.
Page 17