Exam 12: A Macroeconomic Theory of the Open Economy

Suppose, due to political instability, Russians suddenly choose to purchase SA assets as opposed to Russian assets.Which of the following statements is true regarding the value of the rand and SA net exports? The pound:

The phrase "twin deficits" refers to

In response to an import quota

The open economy macroeconomic model examines the determination of

Capital flight is often caused by

An export subsidy should have the opposite effect of

Households make their savings available to borrowers through

If a country's net capital outflow is positive, it is an addition to its demand for loanable funds.

An increase in Japanese citizens' purchases of holidays in SA would

Government trade policies, such as tariffs and quota restrictions on imports,

An increase in SA private saving

The open economy macroeconomic model takes

If a country has a high savings rate relative to other countries, then the

Which of the following statements regarding the loanable funds market is not true?

Which of the following could increase the supply of rands in the foreign exchange market?

Explain how the relation between the real exchange rate and net exports explains the downward slope of the demand for foreign currency exchange curve.Use SA as an example.

Suppose, due to political instability, Russia suddenly choose to invest in SA assets as opposed to Russian assets.Which of the following statements is true regarding SA net foreign investment?

An increase in South Africa's taste for UK produced Hondas would cause the pound to

All other things being equal, an increase in a country's real interest rate reduces net capital outflow.

An example of a trade policy is