Question 1

If Canada imposes an import quota on clothing,which of the following best predicts the consequences?

Accepted Answer

A) Canadian exports increase, imports increase, and net exports are unchanged. 
B) Canadian exports increase, imports decrease, and net exports increase. 
C) Canadian exports decrease, imports increase, and net exports decrease. 
D) Canadian exports decrease, imports decrease, and net exports are unchanged. 
A) Canadian exports increase, imports increase, and net exports are unchanged. 
B) Canadian exports increase, imports decrease, and net exports increase. 
C) Canadian exports decrease, imports increase, and net exports decrease. 
D) Canadian exports decrease, imports decrease, and net exports are unchanged.

Question 2

When Mexico suffered from capital flight in 1994,what happened to Mexico's net capital outflow and net exports?

Accepted Answer

A) The net capital outflow and net exports decreased. 
B) The net capital outflow and net exports increased. 
C) The net capital outflow increased while net exports decreased. 
D) The net capital outflow decreased while net exports increased. 
A) The net capital outflow and net exports decreased. 
B) The net capital outflow and net exports increased. 
C) The net capital outflow increased while net exports decreased. 
D) The net capital outflow decreased while net exports increased.

Question 3

If the world real interest rate exceeds the interest rate that would occur if the Canadian economy were closed,then the Canadian net capital outflow will be which of the following?

Accepted Answer

A) positive 
B) negative 
C) decreasing 
D) increasing 
A) positive 
B) negative 
C) decreasing 
D) increasing

Question 4

Which of the following best predicts the effects of a fall in the Canadian real interest rate?

Accepted Answer

A) Owning Canadian assets becomes less attractive, and net capital outflow rises. 
B) Owning Canadian assets becomes less attractive, and net capital outflow falls. 
C) Owning Canadian assets becomes more attractive, and net capital outflow rises. 
D) Owning Canadian assets becomes more attractive, and net capital outflow falls. 
A) Owning Canadian assets becomes less attractive, and net capital outflow rises. 
B) Owning Canadian assets becomes less attractive, and net capital outflow falls. 
C) Owning Canadian assets becomes more attractive, and net capital outflow rises. 
D) Owning Canadian assets becomes more attractive, and net capital outflow falls.

Question 5

Although trade policies do not affect a country's overall trade balance,they do affect specific firms and industries.

Accepted Answer

A) True 
 B)False

Question 6

In an open economy,the demand for loanable funds comes from both domestic investment and net capital outflow.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is consistent with capital flight from Mexico?

Accepted Answer

A) Mexican net exports decrease. 
B) Mexican investment increases. 
C) Mexican savings increase. 
D) Mexican real interest rate decreases. 
A) Mexican net exports decrease. 
B) Mexican investment increases. 
C) Mexican savings increase. 
D) Mexican real interest rate decreases.

Question 8

In an open economy,which of the following does the market for loanable funds take as given?

Accepted Answer

A) saving 
B) investment 
C) exchange rate 
D) real interest rate 
A) saving 
B) investment 
C) exchange rate 
D) real interest rate

Question 9

If the real exchange rate of the Canadian dollar were above its equilibrium level,the real exchange rate of the Canadian dollar would appreciate.

Accepted Answer

A) True 
 B)False

If Canada imposes an import quota on clothing,which of the following best predicts the consequences?

When Mexico suffered from capital flight in 1994,what happened to Mexico's net capital outflow and net exports?

If the world real interest rate exceeds the interest rate that would occur if the Canadian economy were closed,then the Canadian net capital outflow will be which of the following?

Which of the following best predicts the effects of a fall in the Canadian real interest rate?

Although trade policies do not affect a country's overall trade balance,they do affect specific firms and industries.

In an open economy,the demand for loanable funds comes from both domestic investment and net capital outflow.

Which of the following is consistent with capital flight from Mexico?

In an open economy,which of the following does the market for loanable funds take as given?

If the real exchange rate of the Canadian dollar were above its equilibrium level,the real exchange rate of the Canadian dollar would appreciate.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains from Trade

The Market Forces of Supply and Demand (PART 1)

The Market Forces of Supply and Demand (PART 2)

Measuring a Nation's Income

Measuring the Cost of Living

Production and Growth

Saving,Investment,and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff between Inflation and Unemployment

Five Debates over Macroeconomic Policy

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Exam 13: A Macroeconomic Theory of the Small Open Economy

If Canada imposes an import quota on clothing,which of the following best predicts the consequences?

When Mexico suffered from capital flight in 1994,what happened to Mexico's net capital outflow and net exports?

If the world real interest rate exceeds the interest rate that would occur if the Canadian economy were closed,then the Canadian net capital outflow will be which of the following?

Which of the following best predicts the effects of a fall in the Canadian real interest rate?

Although trade policies do not affect a country's overall trade balance,they do affect specific firms and industries.

In an open economy,the demand for loanable funds comes from both domestic investment and net capital outflow.

Which of the following is consistent with capital flight from Mexico?

In an open economy,which of the following does the market for loanable funds take as given?

If the real exchange rate of the Canadian dollar were above its equilibrium level,the real exchange rate of the Canadian dollar would appreciate.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains from Trade

The Market Forces of Supply and Demand (PART 1)

The Market Forces of Supply and Demand (PART 2)

Measuring a Nation's Income

Measuring the Cost of Living

Production and Growth

Saving,Investment,and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff between Inflation and Unemployment

Five Debates over Macroeconomic Policy

Filters