Exam 32: A Macroeconomic Theory of the Open Economy

If at a given real interest rate desired national saving is $60 billion, domestic investment is $30 billion, and net capital outflow is $20 billion, then at that real interest rate in the loanable funds market there is a

Which of the following make(s) demand for U.S. dollars in the market for foreign-currency exchange higher than otherwise?

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

Other things the same, if the U.S. interest rate falls, then U.S. residents will want to purchase

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

Which of the following decreases if the U.S. removes an import quota on computer components?

What happens to each of the following if investment becomes more desirable at each interest rate? a. the interest rate b. net capital outflow c. the exchange rate

The theory of purchasing-power parity implies that the demand curve for foreign-currency exchange is

If at a given real interest rate desired national saving is $140 billion, domestic investment is $90 billion, and net capital outflow is $60 billion, then at that real interest rate in the loanable funds market there is a

An increase in the budget deficit causes net capital outflow to

In equilibrium which of the following happens if the U.S. imposes tariffs on power tools?

An increase in the government budget deficit shifts the supply of loanable funds to the left.

In the open-economy macroeconomic model which of the following falls if there is an increase in the budget deficit?

Other things the same, which of the following would a rise in the real interest rate raise: desired investment spending, desired national saving, desired net capital outflow?

In the open-economy macroeconomic model, if investment demand increases, then

A country has national saving of $100 billion, government expenditures of $30 billion, domestic investment of $80 billion, and net capital outflow of $20 billion. What is its demand for loanable funds?

In the open-economy macroeconomic model, if net capital outflow increases then

In 2009 Greece's budget deficit rose and people became worried about the ability of the Greek government to continue to make payments on its debt. Which of these events raise a country's interest rates?

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

In which case(s) does(do) a country's demand for loanable funds shift left?