Exam 32: A Macroeconomic Theory of the Open Economy

Which of the following would cause the real exchange rate of the U.S.dollar to depreciate?

In the open-economy macroeconomic model,if a country's interest rate rises,then its

The purchase of a capital asset adds to the demand for loanable funds only if that asset is a domestic one.

Figure 32-7 -Refer to Figure 32-7.Which of the following is consistent with capital flight from Mexico?

A U.S.-imposed quota on appliances would shift

A government budget deficit

Refer to Figure 32-6.If the economy were initially in equilibrium at r₂ and E₃ and the government removed import quotas,the exchange rate would

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

In the open economy macroeconomic model,the price that balances supply and demand in the market for foreign-currency exchange model is the

If a country removed an import quota on cotton,then overall that country's

Figure 32-2 -Refer to Figure 32-2.What are the equilibrium values of the real exchange rate and net exports?

If the world thought that many banks in a certain country were at or near the point of bankruptcy,then that country's real exchange rate

If at a given real interest rate desired national saving would be $50 billion,domestic investment would be $40 billion,and net capital outflow would be $20 billion,then at that real interest rate in the loanable funds market there would be a

If a country went from a government budget deficit to a surplus,national saving would

In the open-economy macroeconomic model,the amount of net capital outflow represents the quantity of dollars

Trade policies

Net capital outflow represents the quantity of dollars supplied in the foreign-currency exchange market.

In the open-economy macroeconomic model,the supply of loanable funds equals

Figure 32-4 -Refer to Figure 32-4.Suppose that the government goes from a budget surplus to a budget deficit.The effects of the change could be illustrated by

Which of the following contains a list only of things that decrease when the budget deficit of the U.S.increases?