Assigment 2 Essay

993 Words4 Pages
Week 3 Homework Assignment - Chapter 5 and Chapter 6 (24 points)

Student Name: ___________________________________________

Chapter 05: (12 points)

____ 1. The forecasting technique which attempts to forecast short-run changes and makes use of economic indicators known as leading, coincident or lagging indicators is known as: (1point)
a. econometric technique
b. time-series forecasting
c. opinion polling
d. barometric technique
e. judgment forecasting

____ 2. The variation in an economic time-series which is caused by major expansions or contractions usually of greater than a year in duration is known as: (1point)
a. secular trend
b. cyclical variation
c. seasonal effect
d. unpredictable random factor
e. none of
…show more content…
e. The Federal Reserve has no impact at all on interest rates.

____ 11. US and Canada can both grow wheat and can do mining. Use the following table to look for which country has a comparative advantage in mining. (HINT: Find the cost of mining in terms of wheat in each country.)

Absolute Cost in US Absolute Cost in Canada Wheat $5 C$8 Mining $10 C$12

a. Canada has a comparative advantage in mining.
b. The US has a comparative advantage in mining.
c. No comparative advantage in mining exists for either nation.
d. We must first know the exchange rate to be able to answer this question.
e. Both a and b.

____ 12. If the value of the U.S. dollar rises from €1.0 per dollar to €1.3 per dollar,
a. imports of automobiles from Germany will decline
b. American inflation will increase
c. German exports of all traded goods will decline
d. American exports to Germany will decrease
e. sales by American manufacturers for the export markets will increase.

____ 13. The purchasing power parity hypothesis implies that an increase in inflation in one country relative to another will over a long period of time
a. increase exports
b. reduce the competitive pressure on prices
c. lower the value of the currency in the country with the higher inflation rate
d. increase foreign aid
e. increase the speculative demand for the currency

____ 14. In a recession, the trade balance often improves
Open Document