Exam 15: Net Exports and International Finance

Consider only the flow of funds spent on acquiring assets. Which of the following is true if the U.S. has a net capital inflow of funds? I. Foreign purchases of U.S. assets are greater than U.S. residents' purchases of foreign assets. II. Foreign purchases of U.S. assets are less than U.S. residents' purchases of foreign assets. III. There is a capital account surplus. IV. There is a capital account deficit.

A free-floating exchange rate is only flexible if there is a deficit in the foreign exchange Jmarket.

In the long run, international trade will result in the loss of jobs for a nation.

An increase in the U.S. dollar exchange rate means foreigners must pay

Consider a country that has a gold standard exchange rate system. Which of the following occurs if this country expands its money supply to eliminate a surplus in its balance of payments?

The balance between spending flows into a country and spending flows out of that country is Jcalled a country's

Which of the following statements is true of a country that has a gold standard exchange Jrate system?

Which of the following has contributed most to the significant increase in world trade since 1990?

If each nation specializes and produces those goods in which it has a(n)

Employment in the long run does not depend on the trade deficit.

Suppose that at the fixed exchange rate implied by the gold standard, the quantity supplied of Podgland's currency exceeded the quantity demanded. This implies that

All other things unchanged, an increase in the value of the dollar against the euro

Members of the European Union

A deficit in the current account implies

International trade does not affect the economy's natural level of employment.

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 Jits capital account?

Under the simplifying assumptions made in the text, a current account deficit

When U.S. residents purchase foreign assets,

Figure 15-1 -Refer to Figure 15-1. Suppose interest rates in the U.S. rise relative to interest rates in Jforeign countries. This event will

All other things unchanged, an decrease in the value of the dollar against the euro