Exam 15: Net Exports and International Finance

Suppose Grovner's exports equal $950 billion, its imports equal $1,000 billion, and Jpurchases of foreign assets by its citizens equals $900 billion. What is Grovner's balance on its capital account?

If Canada has a capital account deficit, it means that

For fixed exchange rates among nations to work, participating nations must

In general, exchange rates

Under a gold standard exchange rate system, a nation's money supply is regulated by

Which of the following is a disadvantage of a free-floating exchange rate system?

What were the primary characteristics of the Bretton Woods Agreement? Why was it successful from 1945 to 1971? What factors caused it to be abandoned in the early 1970s? What system replaced it and how successful has it been?

A recession in the United States will

Suppose the U.S. imposes an import quota on lamb meat from New Zealand. Which of the following individuals is most likely to oppose this quota?

Figure 15-1 -Refer to Figure 15-1. Which of the following is true of the equilibrium quantity, Q₁?

An increase in exports would shift the U.S. aggregate demand curve to the left.

Figure 15-2 -Refer to Figure 15-2. Suppose the exchange rate between the dollar and the British pound Jis fixed at £0.3 per dollar. Now suppose U.S. residents choose to purchase more British goods and services. What happens in the foreign exchange market?

Suppose Salvania's exports equal $500 billion and its imports equal $400 billion. JForeigners purchased $200 billion worth of assets in Salvania. What is Salvania's balance in its current account?

If the U.S. has a capital account surplus, it means that

Which of the following is an example of a quota?

In the short run, a decrease in net exports causes

International trade has the potential to

Which of the following is an example of a tariff?

An increase in net exports, all other things unchanged

Comparative advantage in production of a good occurs