Exam 32: A Macroeconomic Theory of the Open Economy

Figure 32-7 Refer to this diagram of the open-economy macroeconomic model of the Mexican economy to answer the questions below. -Refer to Figure 32-7. Suppose that the Mexican economy starts at r2 and e3. Which of the following is consistent with the effects of capital flight?

In the open-economy macroeconomic model, the market for loanable funds equates national saving with

In the open economy macroeconomic model, the amount of dollars demanded in the market for foreign-currency exchange at a given real exchange rate increases if

In the open-economy macroeconomic model, if there were a surplus in the market for foreign-currency exchange, the real exchange rate would appreciate.

A U.S.-imposed quota on automobiles would shift

Other things the same, a lower real interest rate decreases the quantity of

Which of the following is correct concerning the open-economy macroeconomic model?

Explain how the relation between the real exchange rate and net exports explains the downward slope of the demand for foreign-currency exchange curve.

In 1998 the Russian government defaulted on its bonds. According to the open-economy macroeconomic model, this should have

If the supply of loanable funds curve shifts right, then the equilibrium

Other things the same, in the open-economy macroeconomic model, which of the following would make China's net capital outflow increase?

Which of the following would cause the real exchange rate of the U.S. dollar to appreciate?

Refer to Budget in Recession. This change in the deficit causes net capital outflow to change. How is this change in net capital outflow shown in the market for foreign-currency exchange? What happens to the exchange rate?

In the open­economy macroeconomic model, if a country's interest rate rises, then its

If a government has a budget surplus, then public saving

According to the open-economy macroeconomic model, import quotas increase which of the following

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

If a country removed an import quota on cotton, then overall that country's

Refer to Depositors Move Funds Out of Greek Banks. Which curve in the domestic loanable funds market shifted and which direction did it shift?

Refer to Depositors Move Funds Out of Greek Banks. Because of depositors reactions what happened to net capital outflow?