Exam 18: Macroeconomics in an Open Economy

Monetary policy has a greater impact in an open economy than it does in a closed economy.

If the balance on the current account is $346 billion and the balance on the financial account is -$204 billion,what is the balance on the capital account,assuming no statistical discrepancy?

Which of the following would increase net exports in the United States?

Expansionary fiscal policy should raise the exchange rate of the dollar.

An increase in capital outflows from the United States will

Public saving equals taxes minus government spending minus transfer payments.

Contractionary monetary policy should increase foreign financial investment in the United States.

Net foreign investment is a measure of net capital outflows,equal to capital outflows minus capital inflows in a given period of accounting.

When exchange rates are ________,we say that the country's exchange rate is fixed.

How would a decrease in the U.S.budget deficit affect the exchange rate in the market for dollars?

A decision by foreign central banks to sell their holdings of U.S.Treasury bonds will

If the balance of the current account in the United States is -$900 billion,which of the following is most likely to be true?

Figure 18-1 -Refer to Figure 18-1.The appreciation of the dollar is represented as a movement from

Although based in the United States,Amazon is a global company with about ________ of its sales outside of the United States.

Why does continued foreign investment in U.S.stocks and bonds and foreign companies continuing to build factories in the United States result in a current account deficit in the United States?

An increase in capital inflows will

Suppose the U.S.Congress is successful in enacting tariffs large enough to eliminate the current account deficit.What would happen to the level of domestic investment?

If the United States has a current account deficit and the capital account is zero,which of the following must be true?

If the government finances an increase in government purchases with an increase in taxes,which of the following would you not expect to see?

When net capital flows are positive