Exam 32: A Macroeconomic Theory of the Open Economy

In the 1980s,both the U.S.budget and U.S.trade deficit increased.

Figure 32-3 -Refer to Figure 32-3.Suppose that the government goes from a budget surplus to a budget deficit.The effects of the change could be illustrated by

An increase in the U.S.real interest rate induces

Suppose the U.S.supply of loanable funds shifts left.This will

A U.S.imposed quota an agricultural products would shift

If the real exchange rate for the dollar is above the equilibrium level,the quantity of dollars supplied in the market for foreign-currency exchange is

Suppose that U.S.investors decide that investment opportunities in African countries have improved.What happens to U.S.net capital outflow? What happens to the U.S.real interest rate?

Suppose that the government of Syria raises its budget deficit.The real exchange rate of the Syrian pound would

In the open economy macroeconomic model net capital outflow is equal to the quantity of

If a country increases its government budget deficit,the

Fill in the table below with the direction of the variables that change in response to the events in the first column.

A government budget deficit

If for some reason Americans wished to purchase more foreign assets,then other things the same

A trade policy is a government policy

U.S.-imposed trade quotas would

Figure 32-2 -Refer to Figure 32-2.Which curve shows the relation between the exchange rate and net exports?

In 2002,the United States placed higher tariffs on imports of steel.According to the open-economy macroeconomic model this policy should have

Trade policies

When Mexico suffered from capital flight in 1994,Mexico's real interest rate

When a country runs a government budget deficit