Started on Wednesday, 17 October 2018, 6:46 AM

State Finished
Completed on Wednesday, 17 October 2018, 7:19 AM
Time taken 33 mins 35 secs
Marks 10.00/15.00
Mark 2.50 out of 3.75 (67%)
Question 1
Correct
Mark 1.00 out of 1.00

Flag question

Question text

A nation's investment must be financed by

Select one:

a. the government's budget deficit.

b. borrowing from the rest of the world only.

c. national saving plus borrowing from the rest of the world.

d. national saving only.

e. money supply controlled by the Reserve Bank.

Feedback

Your answer is correct.

The correct answer is: national saving plus borrowing from the rest of the world.

Question 2
Incorrect
Mark 0.00 out of 1.00

Flag question

Question text

If the real interest rate exceeds the equilibrium real interest rate,
Select one:

a. borrowers will be unable to borrow all of the funds they want to borrow and the real
interest rate will fall.

b. lenders will be unable to find borrowers willing to borrow all of the available funds and
the real interest rate will fall.

c. borrowers will be unable to borrow all of the funds they want to borrow and the real
interest rate will rise.

d. lenders will be unable to find borrowers willing to borrow all of the available funds and
the real interest rate will rise.

e. all of the above answers are correct.

Feedback

Your answer is incorrect.

The correct answer is: lenders will be unable to find borrowers willing to borrow all of the
available funds and the real interest rate will fall.

Question 3
Correct
Mark 1.00 out of 1.00

Flag question

Question text

If the exchange rate falls, then the expected profit from holding the currency

Select one:

a. decreases.

b. does not change.

c. increases.

d. can either increase or decrease.

e. all of the above.

Feedback

Your answer is correct.

The correct answer is: increases.

Question 4
Incorrect
Mark 0.00 out of 1.00
 Flag question

Question text

The foreign exchange market is

Select one:

a. the market in which approximately $600 trillion in foreign exchange is traded each
year.

b. the place where people buy and sell foreign goods and services.

c. made up of importers, exporters, banks, international travellers and specialist traders.

d. Both A and C are correct.

e. None of the above answers is correct.

Feedback

Your answer is incorrect.

The correct answer is: Both A and C are correct.

Question 5
Correct
Mark 1.00 out of 1.00

Flag question

Question text

The law of demand for dollars in the foreign exchange market means that the

Select one:

a. lower the exchange rate, the greater the quantity of dollars demanded.

b. higher the exchange rate, the smaller the quantity of dollars demanded.

c. lower the exchange rate, the smaller the quantity of Australian exports demanded.

d. higher the exchange rate, the smaller the quantity of pounds demanded.
e. Both answers A and B are correct.

Feedback

Your answer is correct.

The correct answer is: Both answers A and B are correct.

Question 6
Correct
Mark 1.00 out of 1.00

Flag question

Question text

Fiji’s balance of payments account will include all of the following EXCEPT the

Select one:

a. capital and financial account.

b. current account.

c. government deficit or surplus.

d. Net exports of goods and services.

e. reserve assets account.

Feedback

Your answer is correct.

The correct answer is: government deficit or surplus.

Question 7
Correct
Mark 1.00 out of 1.00

Flag question

Question text

A country's balance of payments accounts record

Select one:

a. the international trading, borrowing and lending positions of a country over a period of
time.

b. only the goods purchases among economies over a period of time.

c. the flow of human and physical capital among economies over a period of time.

d. only official transactions between government and the private sector over a period of
time.

e. all of the above.

Feedback

Your answer is correct.

The correct answer is: the international trading, borrowing and lending positions of a
country over a period of time.

Question 8
Incorrect
Mark 0.00 out of 1.00

Flag question

Question text

A factor helping determine demand for the Fijian dollar in the foreign exchange market is

Select one:

a. the expected future interest rate.

b. the amount of Fijian imports.

c. the supply of Fijian dollars.

d. the expected future exchange rate.

e. All of the above.

Feedback

Your answer is incorrect.

The correct answer is: the expected future exchange rate.

Question 9
Correct
Mark 1.00 out of 1.00

Flag question

Question text

According to the Ricardo-Barro effect,

Select one:

a. taxpayers fail to foresee that government deficits imply higher taxes in future.

b. government fiscal deficits increase households' expected future disposable income.

c. fiscal deficits raise the real interest rate.

d. households increase their personal saving when governments run fiscal deficits.

e. none of the above.

Feedback

Your answer is correct.

The correct answer is: households increase their personal saving when governments run
fiscal deficits.

Question 10
Correct
Mark 1.00 out of 1.00

Flag question

Question text

Australians demand Japanese yen in order to

Select one:

a. allow the Japanese to buy Australian products.

b. balance the current account.

c. supply Australian goods in Japanese markets.

d. buy Japanese products.

e. balance the net exports account.

Feedback

Your answer is correct.

The correct answer is: buy Japanese products.

Question 11
Incorrect
Mark 0.00 out of 1.00

Flag question

Question text

A rise in the real interest rate

Select one:

a. creates a movement upward along the demand for loanable funds curve.

b. creates a movement downward along the demand for loanable funds curve.

c. shifts the demand for loanable funds curve rightward.

d. shifts the demand for loanable funds curve leftward.

e. all of the above answers are correct.

Feedback

Your answer is incorrect.

The correct answer is: creates a movement upward along the demand for loanable funds
curve.

Question 12
Correct
Mark 1.00 out of 1.00

Flag question

Question text

Hyundai is a large South Korean company that produces finished steel products. Hyundai
plans to buy raw steel from Australia. As a result, the

Select one:
a. demand curve for South Korean won shifts leftward.

b. demand curve for Australian dollars shifts leftward.

c. demand curve for Australian dollars shifts rightward.

d. demand curve for South Korean won shifts rightward.

e. demand curve for South Korean won won’t shift.

Feedback

Your answer is correct.

The correct answer is: demand curve for Australian dollars shifts rightward.

Question 13
Correct
Mark 1.00 out of 1.00

Flag question

Question text

Greater optimism regarding the expected profits from investment projects

Select one:

a. shifts the demand curve for loanable funds curve downwards.

b.
causes a movement downward along the demand for loanable funds curve.

c. shifts the demand for loanable funds curve rightward.

d.
shifts the demand for loanable funds curve leftward.

e.
causes a movement upward along the demand for loanable funds curve.

Feedback

Your answer is correct.

The correct answer is: shifts the demand for loanable funds curve rightward.

Question 14
Correct
Mark 1.00 out of 1.00
 Flag question

Question text

The Reserve Bank of Fiji can influence the exchange rate by

Select one:

a. buying or selling Fijian dollars.

b. changing interest rates.

c. Both answers A and B are correct.

d. increasing level of regulation of the financial sector.

e. None of the above answers is correct.

Feedback

Your answer is correct.

The correct answer is: Both answers A and B are correct.

Question 15
Incorrect
Mark 0.00 out of 1.00

Flag question

Question text

The crowding-out effect refers to

Select one:

a. private saving crowding-out government saving.

b. government spending crowding-out private spending.

c. private investment crowding-out public saving.

d. government investment crowding-out private investment.

e. public savings reducing private savings.

Feedback
Your answer is incorrect.
The correct answer is: government investment crowding-out private investment.