Exam 15: International and Balance of Payments Issues in the Macro Economy

You are given the following information. Savings S = 150 Investment I = 100 Taxes T = 250 Government Purchases G = 500 Compute the level of private savings, public savings, national savings, and net exports.

In the foreign exchange market, U.S. residents wishing to purchase foreign exports or foreign real and financial assets must:

Gold certificates, special drawing rights, the reserve position of the IMF, and the holdings of foreign currencies represent:

In the foreign exchange market, the quantity U.S. dollars supplied is a function of:

An increased supply of U.S. dollars on the foreign exchange market, all else equal, will result in an appreciation of the U.S. dollar.

A record of all transactions between residents of the reporting country and residents of the rest of the world over a period of time is called the:

As a currency appreciates:

Under a fixed exchange rate system, the central bank of a country experiencing a balance of payments deficit will:

Stating the dollar has strengthened against the yen means the dollar has depreciated.

When a country's import spending exceeds export spending, the country is experiencing a:

The Bretton Woods conference in 1944 established the gold standard, which was abandoned in 1971.

Domestic currency appreciation will:

Borrowing from abroad represents:

When countries use currency boards to fix exchange rates, or are part of a currency union, or have formally adopted the currency of another country, this is considered an):

The major factor contributing to the appreciation of the dollar between 1995 to 2000 was:

In 2003, China's control of the value of the yuan became an economic and political issue for the U.S. because:

In the foreign exchange market, the quantity U.S. dollars demanded is a function of:

In the foreign exchange market, a balance of payments deficit is represented by:

Using the foreign exchange market diagram, graphically illustrate and explain the impact of an increase in U.S. income, all else constant, on the exchange rate.

Equilibrium in the foreign exchange market implies equilibrium in the balance of payments.