课程名称︰国际金融
课程性质︰经济系必修
课程教师︰曹添旺
开课学院：社会科学院
开课系所︰经济学系
考试日期（年月日）︰2017.06.15
考试时限（分钟）：180分钟
试题 :
1. (30%) Discuss the following statements:
a. When a change in a country's nominal interest rate is caused by a rise in
the expected real interest rate, the domestic currency appreciates. When the
change is caused by a rise in expected inflation, the currency depreciates.
b. A temporary increase in government spending cause the current account to
fall by a smaller amount than does a permanent increase in government
spending.
c. A devaluation under a fixed rate has the same long-run effect as a
proportional increase in the money supply under a floating rate.
2. (20%) The real exchange rate is defined to be E(CPI*/CPI)
a. If PPP holds, what is the rate of change of the CPI when the foreign
inflation rate is 3 percent per year and
i. the nominal exchange rate is fixed?
ii. the domestic currency is depreciating at 7 percent per year?
iii. the domestic currency is appreciating at 3 percent per year?
b. Let CPI=Pn^a*Pt^1-a, where Pn is the price of nontraded goods, Pt the
price of traded goods, and a the weight given to the former in the
consumption basket. Define CPI* analogously. Express the real exchange rate
as a function of the relative price Pn/Pt in each country.(Assume the law of
one price for traded goods.)
c. If the domestic and foreign CPIs each give a weight of two thirds to
nontraded goods and one third to traded goods, what is the rate of change of
real exchange rate if
i. the relative price of nontraded goods is rising at 3 percent per year in
thedomestic country (and is constant in the foreign country)?
ii. the relative price of nontraded goods is rising at 3 percent per year
in both countries?
iii.the relative price of nontraded goods is constant, but within traded
goods there is an increase in EP*t/Pt - a shift in terms of trade running
against the home country - of 3 percent per year?
3. (10%) Suppose the Samsung smartphone is sold at $120 in the US and 230 real
in Brazil. The market exchange rate is 2.3 real/$ and there is a $5 shipping
cost from the US to Brazil. Is it profitable for buyers to import from US to
Brazil? If the expected exchange rate of the real (real/$) declines by 8
percent, will the buyer then choose to import?
4. (10%) Explain why the expansionary monetary policy becomes ineffective
during a liquidity trap? Suppose the government undertakes an ecpansionary
fiscal policy by increasing its expenditure on military equipment. Here would
an expansionary fiscal policy be more effective than expansionary monetary
policy to escape a liquidity trap?
5. (10%)
a. If you know calculus, prove that the Marshall-Lerner condition is the
correct condition necessary and sufficient for a devaluation to improve TB,
the trade balance expressed in domestic currency, starting from TB = 0.
b. Starting from TB < 0,is the Marshall-Lerner condition too strong or too
weak for a devaluation to improve the trade balance?
6. (20%) How would you draw the DD-AA diagram when the current account's
response to exchange rate changes follows a J-curve? Use this modified diagram
to examine the effects of temporary and permanent changes in monetary and
fiscal policy.