Assume that in the past month there is a $200 billion increase from the previous
ID: 1092242 • Letter: A
Question
Assume that in the past month there is a $200 billion increase from the previous month in the value of US imports of oil due to higher oil prices. Holding everything else constant (including exports), the effect will be:
This is a capital account transaction, thus there is no change in the value of GDP.
A decrease in the value of GDP.
This is a current account transaction, thus there is no change in the value of GDP.
An increase in the value of GDP.
Assume that the Chinese government purchases $100 billion worth of U.S. Treasury bonds. The effect will be:
This is a capital account transaction, thus there is no change in the value of GDP.
An increase in the value of GDP.
This is a current account transaction, thus there is no change in the value of GDP.
A decrease in the value of GDP.
Caterpillar is a U.S. company that makes construction equipment manufactured in the United States. Which of the following scenarios will be the most advantageous for the company:
The dollar depreciates and there is a decrease in the U.S. economic growth.
The dollar depreciates and there is a decrease in foreign economic growth.
The dollar depreciates and there is an increase in foreign economic growth.
The dollar appreciates and there is an increase in foreign economic growth.
Siemens is a European industrial firm. Which of the following scenarios will be the most advantageous for the company's exports to the United States:
The dollar depreciates and there is an increase in U.S. economic growth.
The dollar appreciates and there is an increase in foreign economic growth.
The dollar depreciates and there is a decrease in foreign economic growth.
The dollar appreciates and there is an increase in U.S. economic growth.
A.This is a capital account transaction, thus there is no change in the value of GDP.
B.A decrease in the value of GDP.
C.This is a current account transaction, thus there is no change in the value of GDP.
D.An increase in the value of GDP.
Explanation / Answer
1)This is a capital account transaction, thus there is no change in the value of GDP.
2)An increase in the value of GDP.
3)The dollar appreciates and there is an increase in foreign economic growth
4)The dollar depreciates and there is an increase in U.S. economic growth