1. An increasing exchange rate of the US$ dollar is caused by?

Increasing demand for oil in Japan and China

2. To protect the producer of certain goods the government will..
Set a minimum price for the goods

3. Unemployment caused by cyclical fluctuation in the demand is called..
Demand deficiency unemployment (Keynesian)

4. Unemployment due to the movement of production from one country to another is called.
Structural unemployment

5. To protect the local industry or market, tariffs are used. Examples of so-called non-tariff barriers
are..
All of the above: Import Quota, Government purchasing policies

6. Major determents of investment are.
Increasing return on investments and expected increasing profit rates

7. Economic activity will increase in case of.
Increasing government spending

8. A Depreciation of currency will most likely lead to.
An increase in the export of the country

9. A multiplier of 3 means???
An increase of investments of 10 billion will lead to an increase in income of 30 billion

10. Economic growth can occur when:
Technological progress given the capital stock

11. I. Increased savings will eventually lead to higher investments and will be responsible for an
increase in national income
II.An increase in savings will lead to lower interest rate and will definitely lead to higher levels of
investment
Both false

12. The function of money is
A medium of the exchange on the goods and service market and a valuation of assets

13. The role of the central bank is.
Due treasure of the government income and spending

14. Demand for local currency will increase due to
Increased demand for goods and services

15. There are various forms of inflation
Demand pull inflation will occur when demand for goods => max. supply

16. I. An increase in the supply of money without an increase in the real output will lead to inflation
II. A cut in the money supply and no change in GDP at current prices will increase the . Of
circulation
I and II are true

Info zur Nr. 17
Apl. = Average productivity of labour = 100.000 EUR
Total workforce = N supply = 30 mio full time units
Capital ratio = 2
Capital supply = 5.800 bio
The current national income = 2.600 bio
The multiplier = 1.2

17.
The total unemployment = 4 mio
18.
Equals 1 mio
19.
250 billion

20. The trade of between inflation and unemployment means
Increasing unemployment will lead to a lower level of inflation

21. International trade will benefit trading countries when
International terms of trade or between the national terms of trade

22. Due to the reduction of import tariffs the international trade will
Increase

23. The WTO has 2 main objectives..
Reduction of tariff and non-tariff barriers

24. The EU is
Common market

25. The role of the IMF is
Secure financial stability, facilitate international trade, promote high employment, sustainable
economic growth, and reduce poverty around the world (promote global and stable growth)

26: Even though international trade will benefit all countries try to limit free trade, possible barriers
are
C both: Quota, Administrative regulations

27. Terms of trade are defined as.
Reduce reliance on goods, prevent foreign monopoly and prevent unfair practices (average price of
exports/average price of imports

28. Reasons for restricting trade are
A and B is right: The infant industry argument / the protection of national employment

29. An import tariff will
Increase of government revenues

30. Trade diversions will occur when
Consumption shifts from a producer outside the customs union to a producer inside the customs
union


34. The EU consists of
27 countries

35. Free floating exchange rates will..
Automatically correct BOP disequilibria


Open Questions

1: Currently the exchange rate of the Euro against the US dollar drops, How does this affect the EU
export?
2: The exchange rate of a currency is determined by 2 factors
3: Explain the exchange rate effects of a larger government budget deficit
4: Effects of a fast growing economy on the energy and currency market..
5: Advantages and disadvantages of fixing an exchange rate of a major currency.
6: Increasing number of trade blocks is good or bad for free trade?