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. Assume that each country's equilibrium interest rate is 4%. To reconcile the apparent disequilibrium in both markets, assuming that assets and liabilities are viewed as homogeneous, capital _ will _ interest rates.

(Multiple Choice)

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Question 41

Fast-growing economies often have a greater demand for loanable funds than do slower-growing economies because fast-growing economies:

(Multiple Choice)

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Question 42

If a country's loanable funds market is initially in equilibrium and then there are capital outflows, this will result in a _ in the equilibrium interest rate, while the equilibrium quantity of loanable funds will _.

(Multiple Choice)

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Question 43

What are the advantages and disadvantages of fixed and floating exchange rates?

(Essay)

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Question 44

Suppose that the value of the euro fell from $1.32 on April 30, 2012, to $1.24 on July 5, 2012. This implies that during this period the euro _ and the dollar _.

(Multiple Choice)

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Question 45

Which of the following would supply dollars in the foreign exchange market? I. Americans who want to buy U.S. goods, services, and assets II. Americans who want to buy European goods, services, and assets III. Europeans who want to buy U.S. goods, services, and assets

(Multiple Choice)

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Question 46

Foreign exchange controls are the same thing as floating exchange rates.

(True/False)

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Question 47

Use the following to answer questions : Figure: Change in the Demand for U.S. Dollars -(Figure: Change in the Demand for U.S. Dollars) Look at the figure Change in the Demand for U.S. Dollars. The change from D₁ to D₂ will occur, all other things being equal, if the:

(Multiple Choice)

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Question 48

If Japanese buyers demand more U.S. dollars, then the dollar will ___, the yen will _, the U.S. balance of payments on current account will _, and the U.S. balance of payments on financial account will ___.

(Multiple Choice)

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Question 49

Use the following to answer questions : Scenario: Gizmovia The Republic of Gizmovia wants to maintain the exchange rate of its currency, the gizmo, at $0.50, but the current exchange rate for the gizmo is $0.40. -(Scenario: Gizmovia) Look at the scenario Gizmovia. If Gizmovia uses monetary policy to bring the exchange rate for the gizmo to $0.50, it should _ interest rates by _ the money supply.

(Multiple Choice)

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Question 50

All other things unchanged, a decrease in the value of the dollar against the euro _ U.S. net exports and shifts the aggregate demand curve to the _.

(Multiple Choice)

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Question 51

A U.S. firm buys a new Volvo, built in Sweden. In the U.S. balance of payments, this transaction causes the balance on the _ account to _.

(Multiple Choice)

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Question 52

Which of the following is NOT true of a fixed exchange rate system?

(Multiple Choice)

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Question 53

The exchange rate is determined in the commodities markets.

(True/False)

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Question 54

If a country runs a deficit on its balance of payments for goods and services, to pay for its imports, it must:

(Multiple Choice)

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Question 55

Which of the following is a payment from the United States to foreigners?

(Multiple Choice)

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Question 56

A fixed exchange rate means that the government keeps the exchange rate against some other currency at or near a particular target.

(True/False)

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Question 57

All of the following are major drawbacks of a fixed exchange rate EXCEPT that:

(Multiple Choice)

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Question 58

If the government wants to increase the value of its currency in foreign exchange markets, it can limit the ability of foreigners to buy its currency.

(True/False)

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Question 59

Suppose that China's target exchange rate for the yuan is below its equilibrium exchange rate. What is the possible disadvantage of using monetary policy to achieve the target exchange rate?

(Essay)

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Question 60

Showing 41 - 60 of 467

Fast-growing economies often have a greater demand for loanable funds than do slower-growing economies because fast-growing economies:

If a country's loanable funds market is initially in equilibrium and then there are capital outflows, this will result in a _ in the equilibrium interest rate, while the equilibrium quantity of loanable funds will _.

What are the advantages and disadvantages of fixed and floating exchange rates?

Suppose that the value of the euro fell from $1.32 on April 30, 2012, to $1.24 on July 5, 2012. This implies that during this period the euro _ and the dollar _.

Which of the following would supply dollars in the foreign exchange market? I. Americans who want to buy U.S. goods, services, and assets II. Americans who want to buy European goods, services, and assets III. Europeans who want to buy U.S. goods, services, and assets

Foreign exchange controls are the same thing as floating exchange rates.

Use the following to answer questions : Figure: Change in the Demand for U.S. Dollars -(Figure: Change in the Demand for U.S. Dollars) Look at the figure Change in the Demand for U.S. Dollars. The change from D₁ to D₂ will occur, all other things being equal, if the:

If Japanese buyers demand more U.S. dollars, then the dollar will ___, the yen will _, the U.S. balance of payments on current account will _, and the U.S. balance of payments on financial account will ___.

All other things unchanged, a decrease in the value of the dollar against the euro _ U.S. net exports and shifts the aggregate demand curve to the _.

A U.S. firm buys a new Volvo, built in Sweden. In the U.S. balance of payments, this transaction causes the balance on the _ account to _.

Which of the following is NOT true of a fixed exchange rate system?

The exchange rate is determined in the commodities markets.

If a country runs a deficit on its balance of payments for goods and services, to pay for its imports, it must:

Which of the following is a payment from the United States to foreigners?

A fixed exchange rate means that the government keeps the exchange rate against some other currency at or near a particular target.

All of the following are major drawbacks of a fixed exchange rate EXCEPT that:

If the government wants to increase the value of its currency in foreign exchange markets, it can limit the ability of foreigners to buy its currency.

Suppose that China's target exchange rate for the yuan is below its equilibrium exchange rate. What is the possible disadvantage of using monetary policy to achieve the target exchange rate?

First Principles

Economic Models

Supply and Demand

International Trade 5

Macroeconomics: the Big Picture

Gdp and Cpi: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Fiscal Policy Appendix Taxes and the Multiplier

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Events and Ideas

Graphs in Economics

toward a Fuller Understanding of Present Value

Filters

Exam 19: Open-Economy Macroeconomics

Fast-growing economies often have a greater demand for loanable funds than do slower-growing economies because fast-growing economies:

If a country's loanable funds market is initially in equilibrium and then there are capital outflows, this will result in a _____ in the equilibrium interest rate, while the equilibrium quantity of loanable funds will _____.

What are the advantages and disadvantages of fixed and floating exchange rates?

Suppose that the value of the euro fell from $1.32 on April 30, 2012, to $1.24 on July 5, 2012. This implies that during this period the euro _____ and the dollar _____.

Which of the following would supply dollars in the foreign exchange market? I. Americans who want to buy U.S. goods, services, and assets II. Americans who want to buy European goods, services, and assets III. Europeans who want to buy U.S. goods, services, and assets

Foreign exchange controls are the same thing as floating exchange rates.

Use the following to answer questions : Figure: Change in the Demand for U.S. Dollars -(Figure: Change in the Demand for U.S. Dollars) Look at the figure Change in the Demand for U.S. Dollars. The change from D1 to D2 will occur, all other things being equal, if the:

If Japanese buyers demand more U.S. dollars, then the dollar will _____, the yen will _____, the U.S. balance of payments on current account will _____, and the U.S. balance of payments on financial account will _____.

All other things unchanged, a decrease in the value of the dollar against the euro _____ U.S. net exports and shifts the aggregate demand curve to the _____.

A U.S. firm buys a new Volvo, built in Sweden. In the U.S. balance of payments, this transaction causes the balance on the _____ account to _____.

Which of the following is NOT true of a fixed exchange rate system?

The exchange rate is determined in the commodities markets.

If a country runs a deficit on its balance of payments for goods and services, to pay for its imports, it must:

Which of the following is a payment from the United States to foreigners?

A fixed exchange rate means that the government keeps the exchange rate against some other currency at or near a particular target.

All of the following are major drawbacks of a fixed exchange rate EXCEPT that:

If the government wants to increase the value of its currency in foreign exchange markets, it can limit the ability of foreigners to buy its currency.

Suppose that China's target exchange rate for the yuan is below its equilibrium exchange rate. What is the possible disadvantage of using monetary policy to achieve the target exchange rate?

First Principles

Economic Models

Supply and Demand

International Trade 5

Macroeconomics: the Big Picture

Gdp and Cpi: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Fiscal Policy Appendix Taxes and the Multiplier

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Events and Ideas

Graphs in Economics

toward a Fuller Understanding of Present Value

Filters

If a country's loanable funds market is initially in equilibrium and then there are capital outflows, this will result in a _ in the equilibrium interest rate, while the equilibrium quantity of loanable funds will _.

Suppose that the value of the euro fell from $1.32 on April 30, 2012, to $1.24 on July 5, 2012. This implies that during this period the euro _ and the dollar _.

Use the following to answer questions : Figure: Change in the Demand for U.S. Dollars -(Figure: Change in the Demand for U.S. Dollars) Look at the figure Change in the Demand for U.S. Dollars. The change from D₁ to D₂ will occur, all other things being equal, if the:

If Japanese buyers demand more U.S. dollars, then the dollar will ___, the yen will _, the U.S. balance of payments on current account will _, and the U.S. balance of payments on financial account will ___.

All other things unchanged, a decrease in the value of the dollar against the euro _ U.S. net exports and shifts the aggregate demand curve to the _.

A U.S. firm buys a new Volvo, built in Sweden. In the U.S. balance of payments, this transaction causes the balance on the _ account to _.