Question 1

When Microsoft establishes a distribution center in France,U.S.net capital outflow

Accepted Answer

A)  increases because Microsoft makes a portfolio investment in France. 
B)  decreases because Microsoft makes a portfolio investment in France. 
C)  increases because Microsoft makes a direct investment in capital in France. 
D)  decreases because Microsoft makes a direct investment in capital France. 
A)  increases because Microsoft makes a portfolio investment in France. 
B)  decreases because Microsoft makes a portfolio investment in France. 
C)  increases because Microsoft makes a direct investment in capital in France. 
D)  decreases because Microsoft makes a direct investment in capital France.

Question 2

Other things the same,an increase in the nominal exchange rate raises the real exchange rate.

Accepted Answer

A) True 
 B)False

Question 3

If business opportunities in a country become relatively less attractive relative to those of other countries,then

Accepted Answer

A)  both its net exports and net capital outflows fall. 
B)  both its net exports and net capital outflows rise. 
C)  its net exports fall and its net capital outflows fall. 
D)  its net exports rise and its net capital outflows fall 
A)  both its net exports and net capital outflows fall. 
B)  both its net exports and net capital outflows rise. 
C)  its net exports fall and its net capital outflows fall. 
D)  its net exports rise and its net capital outflows fall

Question 4

A country has $20 billion of domestic investment and net capital outflow of $10 billion.What is saving?

Accepted Answer

A)  $10 billion 
B)  $30 billion 
C)  -$20 billion 
D)  -$30 billion 
A)  $10 billion 
B)  $30 billion 
C)  -$20 billion 
D)  -$30 billion

Question 5

After the 1980s,U.S.net capital outflow was

Accepted Answer

A)  negative,meaning that foreigners were buying more capital assets from the United States than Americans were buying abroad. 
B)  negative,meaning that Americans were buying more capital assets abroad than foreigners were buying from the United States. 
C)  positive,meaning that foreigners were buying more capital assets from the United States than Americans were buying abroad. 
D)  positive,meaning that Americans were buying more capital assets abroad than foreigners were buying from the United States. 
A)  negative,meaning that foreigners were buying more capital assets from the United States than Americans were buying abroad. 
B)  negative,meaning that Americans were buying more capital assets abroad than foreigners were buying from the United States. 
C)  positive,meaning that foreigners were buying more capital assets from the United States than Americans were buying abroad. 
D)  positive,meaning that Americans were buying more capital assets abroad than foreigners were buying from the United States.

Question 6

If the real exchange rate between the U.S.and Argentina is 1,then

Accepted Answer

A)  purchasing-power parity holds,and 1 U.S.dollar buys 1 Argentinean bolivar. 
B)  purchasing power parity holds,and the amount of dollars needed to buy goods in the U.S.is the same as the amount needed to buy enough Argentinean bolivars to buy the same goods in Argentina. 
C)  purchasing power parity does not hold,but 1 U.S.dollar buys 1 Argentinean bolivar. 
D)  purchasing power parity does not hold,but the amount of dollars needed to buy goods in the U.S.is the same as the amount needed to buy enough Argentinean bolivars to buy the same goods in Argentina. 
A)  purchasing-power parity holds,and 1 U.S.dollar buys 1 Argentinean bolivar. 
B)  purchasing power parity holds,and the amount of dollars needed to buy goods in the U.S.is the same as the amount needed to buy enough Argentinean bolivars to buy the same goods in Argentina. 
C)  purchasing power parity does not hold,but 1 U.S.dollar buys 1 Argentinean bolivar. 
D)  purchasing power parity does not hold,but the amount of dollars needed to buy goods in the U.S.is the same as the amount needed to buy enough Argentinean bolivars to buy the same goods in Argentina.

Exam 31: Open-Economy Macroeconomics: Basic Concepts

When Microsoft establishes a distribution center in France,U.S.net capital outflow

Other things the same,an increase in the nominal exchange rate raises the real exchange rate.

If business opportunities in a country become relatively less attractive relative to those of other countries,then

A country has $20 billion of domestic investment and net capital outflow of $10 billion.What is saving?

After the 1980s,U.S.net capital outflow was

If the real exchange rate between the U.S.and Argentina is 1,then

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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