Exam 17: Money in the Open Economy

Under purely flexible exchange rates,

A hard peg may be achieved by

The balance of payments is zero

Capital controls refer to

The large exchange rate depreciations which preceded the Asian Crisis was likely the result of

If the real exchange rate is high, greater than 1,

In the monetary small open-economy model with a flexible exchange rate, an increase in the world real interest rate

In the monetary small open-economy model with a flexible exchange rate, an increase in the domestic money supply causes

If a country's central bank seeks to stabilize the price level and if real shocks from abroad are important, then

In the New Keynesian open economy model, government spending

The Bretton Woods arrangement

An agreement among countries to adopt a common currency is called a

A flexible exchange rate is determined by

If a country's central bank seeks to stabilize the price level and if nominal shocks from abroad are important, then

In the New Keynesian open economy model with a flexible exchange rate, suppose there is an increase in money demand. Which of the following happens?

In the European Monetary Union, the supply of Euros

A capital outflow occurs when

For a country with a fixed exchange rate, foreign exchange reserves are

In the monetary small open-economy model with a flexible exchange rate, an increase in the foreign price level decreases

The International Monetary Fund plays the key role of