Exam 15: Net Exports and International Finance

Suppose the U.S. is a major importer of Japanese automobiles. All other things unchanged, a Jdecrease in subsidies granted by the Japanese governments to its auto manufacturers will

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. Under the terms of the Bretton Woods Agreement, what must happen to bring the exchange rate back to £0.3 per dollar?

Suppose Jaffe's exports equal $50 billion, its purchases of foreign assets equal $200 Jbillion, and foreign purchase of Jaffe's assets equal $100 billion. What is the value of Jaffe's Jexports?

The U.S. and Canada are major trading partners. Suppose the Canadian dollar rises sharply in Jvalue against the U.S. dollar. At the same time, strong income growth in the U.S. increases the demand for Canadian exports. What happens to Canada's net exports if the effect of Canadian dollar appreciation dominates that of strong income growth in the U.S.?

Between 1990 and 2010, world exports have

Which of the following applies to a managed float system? I. Governments and central banks seek to influence exchange rates by buying or selling their own currencies. II. The exchange rates are allowed to float, but their values are influenced by governments. III. Governments intervene to prevent large and sudden swings in the exchange rate.

The newspapers often use the terms "a strong dollar" and "a weak dollar." Ja. What do these terms mean? Jb. Who might benefit from a strong currency and who might be hurt by a strong currency? Jc. Who might benefit from a weak currency and who might be hurt by a weak currency?

An increase in net exports shifts the aggregate demand curve to the left.

During the economic downturn of 2008-2011, the existence of a single currency among euro nations

Prosperity in the United States will

A reduction in net exports, all other things unchanged

As incomes in foreign nations rise, foreigners will buy less from the United States and Jmore from their own economies.

Under the simplifying assumption made in the text, a current account deficit exists when

According to former Federal Reserve Chairman Alan Greenspan, since the mid-1990s, the JU.S. has entered a new phase of globalization that is characterized by decline in what economists call "home bias." What does the term "home bias" means?

Which of the following statements is true?

A change in net exports due to a change in the exchange rate will result in a movement Jalong the aggregate demand curve.

Within the United States, a(n)

Which of the following statements is true?