<p>What other topics should we need to know?</p>
<p>Economic Theories
Fiscal Policy
Monetary Policy
Macro Indicators of GDP
Basic economy</p>
<p>basic economic concepts ( PPC, Supply and demand, market equilibrium)</p>
<p>measurement of economic performance (GDP, recession/expansion, types of unemployment, inflation)
national income and price determination (aggregate demand, macroeconomic equilibrium, fiscal policy)
financial sector (banking, money supply, interest rate)
inflation, unemployment, stabilization policies( recessionary gap/inflationary gap, demand pull inflation, cost push inflation, phillips curve)
economic growth and productivity. ( productive/allocative efficiency, outputs)
international trade and finance. (balance of payment accounts, foreign exchange market)</p>
<p>This is straight out of a syllabus…
good luck</p>
<p>Eh, anyone help me out with this question?</p>
<ol>
<li>If Mexicans increase their investment in the United States, what will occur in the foreign exchange market?
(A) Peso supply increases, and the dollar price of pesos increases
(B) Peso supply increases, and the dollar price of pesos decreases
(C) Peso supply decreases, and the dollar price of pesos increases
(D) Peso supply decreases, and the dollar price of pesos decreases
(E) Peso supply decreases, and the dollar price of pesos does not change</li>
</ol>
<p>Mexicans increase their investment in the United States, will appreciate Dollars but depreciate pesos, as more pesos are demanded to invest. So Im guessing its A</p>
<p>5 steps or PR?</p>
<p>Peso supply will increase, as does dollar demand. Thus, the peso will depreciate, the dollar will appreciate, and it will cost fewer dollars to buy a peso. It’s B.</p>
<p>Thanks!</p>
<p>How about this one?</p>
<ol>
<li>An increase in government spending with no change in taxes leads to a
(A) Lower income level
(B) Lower price level
(C) Smaller money level
(D) Higher interest rate
(E) Higher bond price</li>
</ol>
<p>i think its B</p>
<p>Yeah, it’s B. That’s clear-cut expansionary fiscal policy right there.</p>
<p>It’s not B. Increasing government spending would increase AD and therefore INCREASE price level.
The answer is D. Because the government is increasing its expenditures (G) without increasing its revenues (T), it will be running on a budget deficit. The government will have to borrow to finance the deficit, and thus investment demand and therefore real interest rates will go up.</p>
<p>Ah, my fault. I wasn’t thinking well. I still haven’t started my macro studying. xD It’s alright, I have until the 20th (makeups, woohoo). Would you mind asking me some more questions?</p>
<p>Ok, good. There’s still someone who’s slightly sensible here… It’s definitely D, it’s pulling for the crowding out effect…</p>
<p>yup D assuming that the government doesn’t just print more money, then it would be the price level. If the money supply is fixed, the government (according to crowding out) will need more loans, which increases the demand for loanable funds, driving up the interest rate.</p>
<p>on 2008 macro form b freeresonse NUMBER 2 (b), i do understand that decrease in tariff rates increases import and then moves current account balance toward a deficit. then, how about CAPITAL ACCOUNT BALANCE? The answer says the capital account will move toward a surplus, but as home purchases of foreign assets increase, i think the capital account will move toward a deficit???</p>
<p>Can someone explain #22 again? The peso question…</p>
<p>I understand that US dollars appreciate…
but why does the supply of pesos increase??</p>
<p>Man…I need to do lots of studying this weekend hahah.</p>
<p>Because more pesos are being supplied in order to invest in the U.S. dollar.</p>