Question 1

While according to the model the current account balance will be countercyclical, the balance can also decline due to:

Accepted Answer

A) a temporary positive shock like a good harvest. 
B) a less developed country having a low capital stock. 
C) a permanent decrease in government purchases. 
D) all of the above. 
A) a temporary positive shock like a good harvest. 
B) a less developed country having a low capital stock. 
C) a permanent decrease in government purchases. 
D) all of the above.

Question 2

If the government reduces tariffs or quotas on imports, then:

Accepted Answer

A) real GDP will increase. 
B) the real current account balance falls. 
C) net domestic investment will fall. 
D) all of the above. 
A) real GDP will increase. 
B) the real current account balance falls. 
C) net domestic investment will fall. 
D) all of the above.

Question 3

What are the effects of reducing tariffs and quotas in the open market clearing model?

Accepted Answer

A reduction in tariffs and quotas in the

Question 4

The trade balance is:

Accepted Answer

A) net foreign investment. 
B) the net international investment position. 
C) the real current-account balance less net real asset income from abroad. 
D) all of the above. 
A) net foreign investment. 
B) the net international investment position. 
C) the real current-account balance less net real asset income from abroad. 
D) all of the above.

Question 5

A higher current account deficit is caused by a declining domestic economy.

Accepted Answer

A) True 
 B)False

Question 6

The trade balance is:

Accepted Answer

A) the difference between exports and imports. 
B) real GDP less real domestic expenditure. 
C) the real current-account balance less net real asset income from abroad. 
D) all of the above. 
A) the difference between exports and imports. 
B) real GDP less real domestic expenditure. 
C) the real current-account balance less net real asset income from abroad. 
D) all of the above.

Question 7

If the government reduces tariffs or quotas on imports, then:

Accepted Answer

A) real GDP will increase. 
B) the real current account balance falls. 
C) net domestic investment will rise. 
D) all of the above. 
A) real GDP will increase. 
B) the real current account balance falls. 
C) net domestic investment will rise. 
D) all of the above.

Question 8

The real current account balance equals:

Accepted Answer

A) net foreign investments. 
B) real GNP less real domestic expenditure. 
C) the trade balance plus net real asset income from abroad. 
D) all of the above. 
A) net foreign investments. 
B) real GNP less real domestic expenditure. 
C) the trade balance plus net real asset income from abroad. 
D) all of the above.

Question 9

The real current-account balance is:

Accepted Answer

A) net real asset income from abroad less trade balance 
B) trade balance plus the net real asset income from abroad. 
C) trade balance times the net real asset income from abroad. 
D) trade balance less the net real income from abroad. 
A) net real asset income from abroad less trade balance 
B) trade balance plus the net real asset income from abroad. 
C) trade balance times the net real asset income from abroad. 
D) trade balance less the net real income from abroad.

Question 10

The trade balance is:

Accepted Answer

A) the difference between exports and imports. 
B) real asset income from abroad. 
C) net foreign investment. 
D) all of the above. 
A) the difference between exports and imports. 
B) real asset income from abroad. 
C) net foreign investment. 
D) all of the above.

Question 11

Does a government budget deficit lead to a real current-account deficit?

Accepted Answer

A government budget deficit does not nee

Question 12

In the market clearing model with world markets for goods and credit, an increase in technology, A, in the home country causes:

Accepted Answer

A) an increase in the MPK. 
B) an decrease in home country gross domestic investment. 
C) an increase in lending to foreigners. 
D) all of the above. 
A) an increase in the MPK. 
B) an decrease in home country gross domestic investment. 
C) an increase in lending to foreigners. 
D) all of the above.

Question 13

A decrease in the terms of trade:

Accepted Answer

A) reduces real GDP. 
B) increases consumption. 
C) increases real national saving if the change in terms of trade is less than fully permanent. 
D) all of the above. 
A) reduces real GDP. 
B) increases consumption. 
C) increases real national saving if the change in terms of trade is less than fully permanent. 
D) all of the above.

Question 14

In the market clearing model with world markets for goods and credit, a decrease in technology, A, in the home country causes:

Accepted Answer

A) a larger current account deficit. 
B) a smaller current account deficit. 
C) a higher MPK. 
D) higher domestic gross investment. 
A) a larger current account deficit. 
B) a smaller current account deficit. 
C) a higher MPK. 
D) higher domestic gross investment.

Question 15

While according to the model the current account balance will be countercyclical, the balance can also decline due to:

Accepted Answer

A) a temporary negative shock like a harvest failure. 
B) a less developed country having poor institutions for growth. 
C) a permanent decrease in government purchases. 
D) all of the above. 
A) a temporary negative shock like a harvest failure. 
B) a less developed country having poor institutions for growth. 
C) a permanent decrease in government purchases. 
D) all of the above.

Question 16

With an international sector real GNP is consumption plus gross investment plus government purchases plus net real asset income from abroad.

Accepted Answer

A) True 
 B)False

Question 17

What is the real current account balance?

Accepted Answer

The real current account balance, (B^f_t - B

Question 18

In the market clearing model with world markets for goods and credit, an increase in technology, A, in the home country causes:

Accepted Answer

A) a larger current account deficit. 
B) a smaller current account deficit. 
C) a lower MPK. 
D) lower domestic gross investment. 
A) a larger current account deficit. 
B) a smaller current account deficit. 
C) a lower MPK. 
D) lower domestic gross investment.

Question 19

The terms of trade are:

Accepted Answer

A) (£ per foreign good)/(£ per home good). 
B) the number of units of foreign goods that can be imported for each unit of home goods exported. 
C) home good per foreign good. 
D) all of the above. 
A) (£ per foreign good)/(£ per home good). 
B) the number of units of foreign goods that can be imported for each unit of home goods exported. 
C) home good per foreign good. 
D) all of the above.

Question 20

What are the effects of a permanent increase in technology in the open market clearing model?

Accepted Answer

With a permanent increase in technology,

While according to the model the current account balance will be countercyclical, the balance can also decline due to:

If the government reduces tariffs or quotas on imports, then:

What are the effects of reducing tariffs and quotas in the open market clearing model?

The trade balance is:

A higher current account deficit is caused by a declining domestic economy.

The trade balance is:

If the government reduces tariffs or quotas on imports, then:

The real current account balance equals:

The real current-account balance is:

The trade balance is:

Does a government budget deficit lead to a real current-account deficit?

In the market clearing model with world markets for goods and credit, an increase in technology, A, in the home country causes:

A decrease in the terms of trade:

In the market clearing model with world markets for goods and credit, a decrease in technology, A, in the home country causes:

While according to the model the current account balance will be countercyclical, the balance can also decline due to:

With an international sector real GNP is consumption plus gross investment plus government purchases plus net real asset income from abroad.

What is the real current account balance?

In the market clearing model with world markets for goods and credit, an increase in technology, A, in the home country causes:

The terms of trade are:

What are the effects of a permanent increase in technology in the open market clearing model?

Thinking About Macroeconomics

National-Income Accounting: Gross Domestic Product and the Price Level

Introduction to Economic Growth

Working With the Solow Growth Model

Conditional Convergence and Long-Run Economic Growth

Macroeconomics Without Microeconomic Foundations

Markets, Prices, Supply, and Demand

Consumption, Saving, and Investment

An Equilibrium Business-Cycle Model

Capital Utilization and Unemployment

The Demand for Money and the Price Level

Inflation, Money Growth, and Interest Rates

Government Expenditure

Taxes

Public Debt

Money and Business Cycles I: the Price-Misperceptions Model

Money and Business Cycles Ii: Sticky Prices and Nominal Wage Rates

Exchange Rates

Filters

Exam 18: World Markets in Goods and Credit

While according to the model the current account balance will be countercyclical, the balance can also decline due to:

If the government reduces tariffs or quotas on imports, then:

What are the effects of reducing tariffs and quotas in the open market clearing model?

The trade balance is:

A higher current account deficit is caused by a declining domestic economy.

The trade balance is:

If the government reduces tariffs or quotas on imports, then:

The real current account balance equals:

The real current-account balance is:

The trade balance is:

Does a government budget deficit lead to a real current-account deficit?

In the market clearing model with world markets for goods and credit, an increase in technology, A, in the home country causes:

A decrease in the terms of trade:

In the market clearing model with world markets for goods and credit, a decrease in technology, A, in the home country causes:

While according to the model the current account balance will be countercyclical, the balance can also decline due to:

With an international sector real GNP is consumption plus gross investment plus government purchases plus net real asset income from abroad.

What is the real current account balance?

In the market clearing model with world markets for goods and credit, an increase in technology, A, in the home country causes:

The terms of trade are:

What are the effects of a permanent increase in technology in the open market clearing model?

Thinking About Macroeconomics

National-Income Accounting: Gross Domestic Product and the Price Level

Introduction to Economic Growth

Working With the Solow Growth Model

Conditional Convergence and Long-Run Economic Growth

Macroeconomics Without Microeconomic Foundations

Markets, Prices, Supply, and Demand

Consumption, Saving, and Investment

An Equilibrium Business-Cycle Model

Capital Utilization and Unemployment

The Demand for Money and the Price Level

Inflation, Money Growth, and Interest Rates

Government Expenditure

Taxes

Public Debt

Money and Business Cycles I: the Price-Misperceptions Model

Money and Business Cycles Ii: Sticky Prices and Nominal Wage Rates

Exchange Rates

Filters