Exam 31: Open-Economy Macroeconomics: Basic Concepts

When net capital outflow is negative, it means that on net the value of domestic assets purchased by foreigners exceeds the value of foreign assets purchased by domestic residents.

Most of the change from 1980 to 1987 in U.S. net capital outflow as a percent of GDP was due to a(n)

How do we find the real exchange rate from the nominal exchange rate?

Lydia, a citizen of Italy, produces scarves and purses that she sells to department stores in the United States. Other things the same, these sales

If purchasing-power parity holds, a dollar will buy

A nation has a positive net capital outflow. Which of the following is correct?

A U.S. grocery chain buys bananas from Honduras and pays for them with U.S. dollars.

Between 2000 and 2009, tough economic times lead to

If a McDonald's Big Mac cost $4.50 in the United States and 3.60 euros in the Euro area, then purchasing-power parity implies the nominal exchange rate is how many euros per dollar?

Both foreign direct investment and foreign portfolio investment by U.S. residents increase U.S. net capital outflow.

If a country has Y > C + I + G, then it has

A pound of steak costs $10 in the U.S. and 56.25 riyals (the currency of Saudi Arabia) in Saudi Arabia. If the real exchange rate is 2/3, what is the nominal exchange rate? Show your work.

Net exports of a country are the value of

The increase in the trade deficit in the 1980's reflected a decrease in national saving that is associated with an increase in the government budget deficit.

According to purchasing-power parity, if it took 1,100 Korean Won to buy a dollar this year, but it took 1,000 to buy it last year, then the dollar has

Other things the same, a country could move from having a trade deficit to having a trade surplus if either

A pair of running shoes costs $70 in the U.S. If the price of the same shoes is 4500 rupees in India and the exchange rate is 60 rupees per dollar, than the real exchange rate is

Table 31-2 Colombian Trade Flows -Refer to Table 31-2.​ What are Colombian exports?

When a company from Germany builds an automobile factory in the United States, the German firm has engaged in foreign direct investment.

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