Exam 17: Money in the Open Economy

Purchasing power parity assumes

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

In the monetary small open-economy model with a fixed exchange rate, a temporary decrease in domestic total factor productivity in the absence of any other shocks

Under a flexible exchange rate, an increase in the domestic money supply leads to

A key international institution that plays an important role in exchange rate determination is the

A revaluation of the exchange rate is a policy action that

In the New Keynesian open economy model, if the exchange rate is fixed

In response to a temporary change in total factor productivity, the adoption of capital controls under a fixed exchange rate

Under a hard peg,

Adoption of a currency board

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 fixed exchange rate, the supply of money

The acquisition of a new physical asset by a foreign resident is called

The adoption of capital controls makes

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

In the monetary small open-economy model with a fixed exchange rate, the domestic

In the monetary small open-economy model with a fixed exchange rate, a devaluation of the domestic currency in the absence of any other shocks

Determine the impact of an increase in total factor productivity on domestic aggregate output, absorption, the current account surplus, the nominal exchange rate, and the price level. Assume a flexible exchange rate and flexible prices.

A devaluation of the exchange rate is a policy action that

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