1. Which of the following is most likely to result from a stronger Albanian Lek?
ID: 1144228 • Letter: 1
Question
1. Which of the following is most likely to result from a stronger Albanian Lek? a. Albanian goods exported aboard will cost less in foreign countries, and so b. Albanian goods exported aboard will cost more in foreign countries and so c. Albanian goods exported abroad will cost more in foreign countries, and so d. Albanians' will purchase fewer foreign goods. foreigners will buy more of them foreigners will buy more of them. foreigners will buy fewer of them 2. Financial markets promote greater economic efficiency by channeling funds from to a. investors: savers b. borrowers; savers c. savers, borrowers d. savers; lenders 3. Which of the following is a true statement? Money or the money supply is defined as Federal Reserve notes. The inflation rate is measured as the rate of change in the federal government budget deficit. The aggregate price level is measured as the rate of change in the inflation rate The average price of goods and services in an economy is called the aggregate price level. a. b. c. d. 4. There is a association between inflation and the growth rate of money a. positive; demand b. negative; demand c. positive; supply d. negative; supply 5. A breakdown of financial markets can result in a. financial stability b. rapid economic growth. c. political instability d. stable prices. 6. The principal lender-save rs are a. governments. b. businesses. c. households. d. foreigners.Explanation / Answer
1) A stronger currency makes the export costlier and imports cheaper. In case of a stronger Albanian Lek, the Albanian goods sold abroad will cost more so the foreigners will buy less of those goods. The correct answer is "C".
2) The correct answer is (C) Savers to borrowers. A financial market channels funds from the savers to the people who need those funds i.e. borrowers.
3) The correct answer is "A" the money supply is defined as the federal reserve notes.
4) There is a "positive" relation between inflation and growth rate of money "supply". As the money supply increases the people will have more money in their hand and they will demand more goods, this will increase the inflation with an increase in money supply and vice versa.
5) The break down of financial market will result in "political instability". If the financial market break down the investor will have no money to invest and that could result in job loss and public unrest in the country. All this will ultimately lead to political instability.
6) "Households" are principle saver- lenders and principle borrowers are the businesses.
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