Exam 32: A Macroeconomic Theory of the Open Economy

Which of the following would make both the equilibrium real interest rate and the equilibrium quantity of loanable funds decrease?

When a country experiences capital flight, which of the following rise?

An increase in the U.S. government budget deficit shifts the

If the real interest rate were above the equilibrium rate, there would be a shortage of loanable funds.

In the open-economy macroeconomic model, the supply of dollars in the market for foreign-currency exchange comes from

If the risk of buying U.S. assets rises because it is discovered that lending institutions had not carefully evaluated borrowers prior to lending them funds, then

What happens to each of the following if the supply of loanable funds shifts left? a. the interest rate b. net capital outflow c. the exchange rate

An increase in the U.S. interest rate discourages Americans from buying foreign assets and encourages foreigners to buy U.S. assets.

The imposition of an import quota shifts

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

In the open-economy macroeconomic model, the supply of dollars in the market for foreign-currency exchange is upward sloping.

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

Which of the following results if the U.S. imposes an import quota on computer components?

Which of the following is most likely to result if foreigners decide to withdraw the funds that they have loaned to the United States?

An increase in the budget surplus

Other things the same, in the open-economy macroeconomic model, if the exchange rate rises,

When Mexico suffered from capital flight in 1994, Mexico's net exports

In the open­economy macroeconomic model, if a country's supply of loanable funds shifts right, then

When a country experiences capital flight, the interest rate

In the open-economy macroeconomic model, if the supply of loanable funds shifts right, then