Exam 31: Open-Economy Macroeconomics: Basic Concepts

The nominal exchange rate is about 2 Aruban florin per dollar.If a basket of goods in the United States costs $40,how many florins must a basket of goods in Aruba cost for purchasing power parity to hold?

A country has $45 million of domestic investment and net capital outflow of -$60 million.What is its saving?

If purchasing power parity holds,the price level in the U.S.is 120,and the price level in Canada is 140,which of the following is true?

According to the theory of purchasing-power parity,the nominal exchange rate between two countries must reflect the differing

Derive the relation between savings,domestic investment,and net capital outflow using the national income accounting identity.

If the real exchange rate of the U.S.dollar falls,U.S.net exports will fall.

Which of the following is an example of U.S.foreign portfolio investment?

A roll of duct tape costs 2 Canadian dollars in Canada and 3 U.S.dollars in the U.S.If the nominal exchange rate is .80 Canadian dollars per U.S.dollar.

A U.S.purchase of oil from overseas paid for with foreign currency it already owned

Net capital outflow is the purchase of domestic assets by foreign residents minus the purchase of foreign assets by domestic residents.

Table 31-1 -Refer to Table 31-1.What are Argentina's exports?

According to purchasing-power parity,if prices in the United States increase by a smaller percentage than prices in Poland,then

The country of Sylvania has a GDP of $900,investment of $200,government purchases of $200,and net capital outflow of -$100.What is consumption?

If a country has net exports of $9 billion and sold $50 billion of goods and services abroad,then it has

Other things the same,if a country's domestic investment decreases,then

When making investment decisions,investors

From 1980 to 1987

Many economists believe that the theory of purchasing-power parity describes the forces that determine exchange rates in the long run.

Greg,a U.S.citizen,opens an ice cream store in Bermuda.His expenditures are U.S.

Which of the following equations is always correct in an open economy?