Exam 31: Open-Economy Macroeconomics: Basic Concepts

Suppose a Starbucks tall latte costs $4.00 in the United States and 3.20 euros in the Euro area. Also, suppose a McDonald's Big Mac costs $4.40 in the United States and 5.50 euros in Euro area. If the nominal exchange rate is .80 euros per dollar, the prices of which goods have prices that are consistent with purchasing-power parity?

If a U.S. textbook publishing company sells texts overseas, U.S. net exports

International trade

A country recently had a trade deficit of 350 billion euros. Its residents also purchased 400 billion euros of foreign assets. What was the value of this country's assets purchased by foreigners?

An MP3 player in Singapore costs 200 Singaporean dollars. In the U.S. it costs 100 US dollars. What is the nominal exchange rate if purchasing-power parity holds?

If a bushel of wheat costs $6.40 in the United States, costs 40 pesos in Mexico, and the nominal exchange rate is 10 pesos per dollar, then the real exchange rate is

If U.S. consumers increase their demand for apples from New Zealand, then other things the same New Zealand's

Which of the following is correct?

During 2011 the inflation rate in Brazil was about 6.6% while in the U.S. it was about 3.3%. At the start of 2011 the nominal exchange rate was about 1.7 Brazilian real per U.S. dollar. If purchasing-power parity holds, about what should the nominal exchange rate have been at the end of 2011? Show your work.

Sam, a U.S. citizen, buys bonds issued by a Greek company that bottles olives. Sam's purchase is

Which of the following statements is incorrect for an open economy?

If P = domestic prices, P* = foreign prices, and e is the nominal exchange rate, which of the following is implied by purchasing-power parity?

Suppose the real exchange rate is 3/4 gallon of country A's gasoline per gallon of U.S. gasoline, a gallon of U.S. gasoline costs $3.00 U.S., and a gallon of gas in country A costs 6 units of their currency. What is the nominal exchange rate?

Nominal exchange rates

The nominal exchange rate is 2 Barbados dollars per U.S. dollar. If the price of a good in Barbados is 3 Barbados dollars and the price in the U.S. is 2 U.S. dollars, what is the real exchange rate to the nearest 100th?

According to purchasing-power parity which of the following would happen if a country raised its money supply growth rate?

A country has net capital outflow of $40 billion. Which of the following is consistent with this net capital outflow?

Which type(s) of economies interact with other economies?

Use the (hypothetical) information in the following table to answer the following questions. Table 31-2 -Refer to Table 31-2. For which country(ies) in the table does purchasing-power parity with the U.S. hold?

Suppose that U.S. citizens purchase more cars made in Korea, and Koreans purchase more bonds issued by U.S. corporations. Other things the same, these actions