1.) Which of the following is true for countries following the gold standard exc

ID: 1100163 • Letter: 1

Question

1.) Which of the following is true for countries following the gold standard exchange rate system?

Discretionary fiscal policy in these countries is hindered.

The value of the exchange rate is relatively stable.

These countries are not prone to deflation or inflation.

These countries are relatively less susceptible to domestic shocks.

2.) According to the Taylor Rule, if the output gap falls by 2% and inflation rises by 2%, then the federal funds rate should rise by

2.0%.

3.0%.

3.5%.

2.5%.

3.) In 2008, Poland was forced to devalue its currency against the Euro. Which of the following groups was most damaged?

German consumers of Polish imports

Polish producers of export goods

Polish homeowners with euro-denominated mortgages

German homeowners with zloty-denominated mortgages

4.) National banks must take overnight loans from the Federal Reserve.

True

False

5.) According to the Taylor Rule, if the output gap falls, the targeted interest rate should fall as well, ceteris paribus.

True

False

Discretionary fiscal policy in these countries is hindered.

The value of the exchange rate is relatively stable.

These countries are not prone to deflation or inflation.

These countries are relatively less susceptible to domestic shocks.

1. B. The value of the exchange rate is relatively stable

2. D.2.5%.

3.D.German homeowners with zloty-denominated mortgages

4.true

5.true

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