Exam 32: A Macroeconomic Theory of the Open Economy

Other things the same,if the U.S.interest rate rises,U.S.assets become ____ attractive.So,desired net capital outflow _____.This change in net capital outflow,shifts the __________ curve in the market for foreign-currency exchange to the ______.

Suppose that the Turkish government budget deficit increases.What curves in the open-economy macroeconomic model shift? Explain why each curve shifts the direction it does.

When a country suffers from capital flight,the demand for loanable funds in that country shifts

When the government budget deficit increases,national saving increases.

In the long run,import quotas increase net exports.

When Mexico suffered from capital flight in 1994,Mexico's real interest rate

Trade policies

An increase in real interest rates in the United States

An increase in the budget deficit

Suppose that Chile has a government budget surplus,and then goes into deficit.This change would

If a government increases its budget deficit,then interest rates

In the open-economy macroeconomic model,net capital outflow links the markets for loanable funds and foreign-currency exchange.

The quantity of U.S.bonds foreigners want to buy is taken into account

If the U.S.imposed an import quota on construction equipment,then the sales of U.S.construction equipment producers would

A country produces two goods,soda and chips.It currently exports soda and imports chips.If it were to impose a tariff on chips,

Imposing an import quota causes the domestic real exchange rate to

In 1995 House Speaker Newt Gingrich threatened to send the United States into default on its debt.During the day of this announcement,U.S.interest rates rose and the real exchange rate of the U.S.dollar depreciated.Which of these changes is consistent with the results of the open-economy macroeconomic model?

In which case(s)does(do)a country's demand for loanable funds shift right?

Net capital outflow represents the quantity of dollars supplied in the foreign-currency exchange market.

Which of the following is included in the supply of U.S.dollars in the market for foreign-currency exchange in the open-economy macroeconomic model?