5 Balance of trade balance is A The difference between the v

5) Balance of trade balance is:

A) The difference between the value of goods exported by a State and the value of goods imported by a State

B) The difference between the value of a financial asset being exported by a State and the value of the financial assets that a State imports

C) Calculation of net investment income, calculation of net exports, and calculation of net transfers in a country.

D) Total current account, financial account, and capital account

6) If the exchange rate changes from $ 0.5 = QAR 1 to $ 0.33 = QAR 1 if:

A) The value of the dollar has risen.

B) The value of the Qatari Riyal decreased.

C) The value of the Qatari Riyal has not changed.

D) The value of the dollar declined.

7) defines the total demand curve as

A) An inverse (negative) relationship between the interest rate and the real product

B) Positive (positive) relationship between the general level of prices and real output

C) An inverse (negative) relationship between the general level of prices and real output

D) Positive (positive) relationship between interest rate and real output

8) Long-term supply curve

A) Turns from bottom to top where there is a positive (positive) relationship between the level of real output and the price level

B) Top-down, indicating an inverse relationship between price level and real output

C) be parallel to the vertical axis where there is no relationship between the price level and the real output

D) be parallel to the horizontal axis where there is no relationship between the level of prices and real output

Solution

5. The correct option is

Option D refers to the balance of payments and option B is also not valid as the Balance of trade only counts the visible items (goods).

6. The correct option is

As after the changes, 1 QAR can purchase less of a dollar, and a dollar can purchase more of a QAR. Before, $1 could purchase only 2 QAR, but now it can purchase 3 QAR. That mean that the dollar is appreciated with respect to QAR, while the QAR has depreciated. Hence, both the value of dollar has risen, and the value of QAR has decreased. Option A and B are actually the same thing.

7. The correct option is

Option A refers to IS curve, option B refers to Aggergate Supply curve, and option D refers to the LM curve.

8. The correct option is

The long run supply curve is a vertical line at the potential output, meaning that in the long run, the output will be the same. It is in the short run it is a positive sloped axis.