Exam 31: Open-Economy Macroeconomics: Basic Concepts

A pair of hiking boots costs $120 in the U.S., if the real exchange rate is 6/5 and the nominal exchange rate is 2 Brazilian reais per dollar, what is the price of the same hiking boots in Brazil? Show your work.

If a U.S. dollar purchases 4 Argentinean pesos, and a gallon of milk costs $3 in the U.S. and 6 pesos in Argentina what is the real exchange rate?

Use the (hypothetical) information in the following table to answer the following questions. Table 31-2 -Refer to Table 31-2. In real terms, U.S. goods are more expensive than goods in which country(ies)?

Which of the following statements is correct for an open economy with a trade surplus?

The value of the goods and services Australia purchases from the U.S. are less than the value of goods and services the U.S. purchases from Australia. The U.S. has

If a dollar currently purchases 12.5 pesos and someone forecasts that in a year it will purchase 14 pesos, then the forecast is given in

Eric, a resident of Sweden, purchases a book printed in the U.S. Which country's exports increase?

What does purchasing-power parity imply about the real exchange rate? Explain what this means.

According to purchasing-power parity, if it took 58 Indian rupees to buy a dollar today, but it took 55 to buy it a year ago, then the dollar has

Last year residents of country A purchased $400 billion of foreign assets and $200 of foreign goods. Foreigners purchased $300 billion dollars of country A's assets. What was the value of country A's exports?

If purchases of French assets by foreigners are less than French purchases of foreign assets, then France has a

Other things the same, which of the following could explain a rise in Sweden's net capital outflow?

John, a U.S. citizen, opens up a Sports bar in Tokyo. This is an example of U.S.

If the U.S. price level is increasing by 3 percent annually and the Japanese price level is increasing by 1 percent annually, then according to purchasing-power parity, by about what percent would the nominal exchange rate be changing?

Which of the following is an example of U.S. foreign direct investment and by itself increases U.S. net capital outflow?

If a nation produces more than it spends what do we know about: A. its net exports? B. its net capital outflow? C. its saving in relation to its domestic investment?

If the nominal exchange rate e is foreign currency per dollar, the domestic price is P, and the foreign price is P*, then the real exchange rate is defined as

An American retailer sells dollars to obtain euros. It then uses the euros to buy ready-to-assemble furniture from Sweden. These transactions

When the central bank of some country prints large quantities of money, that county's currency loses value both in terms of the goods and services it buys and in terms of the amount of foreign currencies it can buy.

When Ghana sells chocolate to the United States, U.S. net exports