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

Under a gold standard, a continual balance of surplus in any country can be sustained only as long as the country's gold reserves hold out.

Domestic currency depreciation will:

Excess supply of dollars in the foreign exchange market represents a balance of payments deficit in the U.S.

A decrease in the supply of dollars on the foreign exchange market, all else equal, will result in:

Using the foreign exchange market diagram, graphically illustrate and explain the impact of foreign interest rates that exceed U.S. interest rates, all else constant, on the exchange rate.

Under a flexible exchange rate system, if the quantity supplied of dollars is less than the quantity demanded of dollars, there is a:

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

A measure of the change in the stock of real and financial assets held by a country's residents in a foreign country and by foreigners in the given country is called the:

Exports are:

An expansionary monetary policy, all else equal, will:

The exchange rate is determined by the interaction of the supply and demand for currencies in which exchange rate system is:

Under a fixed exchange rate system, a central bank's intervention in the foreign exchange market will not affect the domestic money supply.

In the foreign exchange market, the quantity supplied of dollars is 600 whereas the quantity demanded of dollars is 400 results in a:

Net exports are positively related to income in the rest of the world.

In the case of Thailand in 1997, the Thai government was running a large:

The flow of capital results from the changes or differences in interest rates among countries.

Lending abroad represents:

Currency appreciation will decrease net exports.

A trade surplus exists if export spending is less than import spending.

When the central banks of various countries intervene in the foreign exchange market to maintain an exchange rate, this type of exchange rate system is called a exchange rate system.