Exam 15: Net Exports and International Finance

Use the following to answer questions Exhibit: Exchange Rates -(Exhibit: Exchange Rates) An increase in purchases of U.S.goods and services by foreigners Would shift the

When exchange rates are fixed but fiscal and monetary policies are not coordinated, equilibrium exchange rates can move away from their fixed levels.

Given that countries A and B each specialize in the production of one good and voluntarily Trade it for the other country's good, then

In the short run, a decrease in net exports causes

The U.S.and Canada are major trading partners.Suppose the Canadian dollar rises sharply in Value against the U.S.dollar.At the same time, strong income growth in the U.S.increases the demand for Canadian exports.What happens to Canada's net exports as a result of these two Events?

All other things unchanged, a recession in Japan

When foreigners purchase U.S.assets, there is an inflow of funds from abroad and this is recorded as a

Changes in net exports caused by changes in the domestic price level

Which of the following statements is true of a country that has a gold standard exchange Rate system?

Which of the following has contributed most to the significant increase in world trade since 1990?

Which of the following is an advantage of a free-floating exchange rate system?

Suppose that at the fixed exchange rate implied by the gold standard, the quantity demanded of Chahidi's currency exceeded the quantity supplied.This implies that

A change in net exports due to a change in the exchange rate will result in a movement along the aggregate demand curve.

Technological changes have changed production worldwide toward the application of Computers to manufacturing processes.How does this affect countries that have a Comparative advantage in the production of high-tech equipment, such as the United States?

Which of the following statements is true?

Suppose the price of Alston's currency is rising very rapidly.The Central Bank of Alston Announced that it might seek to hold off further increases in order to prevent a major Reduction in net exports.How are buyers and sellers in Alston's foreign exchange market Likely to respond to this announcement?

A system in which exchange rates are set by government policy is called a

The balance between spending flows into a country and spending flows out of that country is Called a country's

Use the following to answer questions Exhibit: Exchange Rates -(Exhibit: Exchange Rates) An increase in U.S.imports would shift the

An exchange rate system in which governments and central banks do not participate in the Currency market is a(n)