Exam 36: Exchange Rates and the Macroeconomy

The expected effects of an increased budget deficit are

Compare the effectiveness of monetary policy in an open economy with mobile international capital with monetary policy in a closed economy. Why is it different? Use an appropriate diagram to illustrate your answer.

The saving rate in the United States fell to nearly zero in the early 2000s. One of the contributing factors to this development was the

If ( T − G ) = ( X − IM ), then ( S − I )

A currency depreciation

Suppose the dollar depreciates from 89 Japanese yen to 79 Japanese yen. One would expect

When the dollar depreciates, the prices of imported inputs

A main reason why the U.S. trade deficit grew so large from 1997 to 2000 was that

When the dollar depreciates, the cost to Americans of foreign goods

Because the United States is highly integrated with the international capital market, international capital flows tend to

What effect did the decrease in the value of the dollar have on the U.S. trade deficit in the period from 2006 to 2009?

If Japan experiences a period of deflation and the United States does not, what will happen in the United States?

An appreciation of the Japanese yen relative to the U.S. dollar will

International capital flows in an open economy have the effect of

Did the large U.S. budget deficits in the 1980s "crowd out" investment as some economists had predicted?

Figure 36-7 In Figure 36-7, there are three aggregate expenditure functions ( C + I + G + X − IM ) for an open economy. Which of the following would cause a movement from C to B?

For a major country with extensive capital flows, what is the effect of an increase in interest rates?

International capital flows strengthen

The depreciation of the Japanese yen in 2002 would ease their problems with regard to recession.