Exam 19: Open-Economy Macroeconomics

Use the following to answer questions: Figure: International Capital Flows -(Figure: International Capital Flows) Look at the figure International Capital Flows. At an interest rate of 4%, the shortage of loanable funds available to _____ borrowers will be satisfied by _____ lenders.

Contractionary monetary policy in the United States will cause the dollar to:

Suppose that the United States and European Union are the only trading partners in the world. If the European Union imposes some import tariffs on U.S. goods, we would expect:

What are the costs of fixing the exchange rate?

An argument against Britain's adopting the euro was that using the euro would make monetary policy less effective.

A currency has depreciated when:

The behavior of the balance of payments on goods and services is determined in the international _____ market.

If asset owners in Japan and the United States consider Japanese and U.S. assets as good substitutes for each other and if the U.S. interest rate is 5% and the Japanese interest rate is 2%, then all of the following will occur EXCEPT that:

An argument against Britain's adopting the euro was that using the euro would make trade more difficult and decrease British productivity.

Use the following to answer questions: Table: International Transactions -(Table: International Transactions) Look at the table International Transactions. The balance on current account is:

The supply of pounds sterling in the foreign exchange market might come from people in Britain who want to buy U.S. goods, services, and assets.

If a country's currency depreciates, all other things equal, exports _____ and imports _____ .

When a country's currency depreciates:

A reduction in the value of a fixed rate currency is called a devaluation.

In 2013, the United States:

Use the following to answer questions: Figure: International Capital Flows -(Figure: International Capital Flows) Look at the figure International Capital Flows. At an interest rate of 4%, the quantity of loanable funds supplied by British lenders is _____ the quantity of loanable funds demanded by British borrowers.

If a government wants to increase the value of its currency in foreign exchange markets, it can:

Many of China's trading partners feel that the yuan is undervalued.

"Foreign exchange controls" refers to the:

In 2010, the $471 billion deficit on the U.S. current account was offset by a surplus of $255 billion on financial account. This difference is the result of a: