Exam 31: Open-Economy Macroeconomics: Basic Concepts

Imagine the real exchange rate is 1/2 gallon of Canadian gasoline per gallon of U.S.gasoline,a gallon of U.S.gasoline costs $2.50 U.S.,and a gallon of Canadian gas costs $6 Canadian.What is the nominal exchange rate?

When a country's central bank increases the money supply,a unit of money

Suppose a McDonalds Big Mac cost $4.00 in the United States and 3.20 euros in the euro area and 5.20 Australian dollars in Australia.If exchange rates are .75 euros per dollar and 1.3 Australian dollars per dollar,where does purchasing power parity hold according to the Big Mac index?

If there is a trade deficit,then

In the United States,a three-pound can of coffee costs about $5.Suppose the exchange rate is about 0.8 euros per dollar and that a three-pound can of coffee in Belgium costs about 3 euros.What is the real exchange rate?

Stacey,a U.S.citizen,buys a bond issued by an Italian pasta manufacturer.

Tony,a U.S.citizen,uses some previously obtained Portuguese currency (escudo)to purchase a bond issued by a Portuguese company.This transaction

Suppose a country had net exports of $8.3 billion and sold $52.4 billion of goods and services abroad.This country had

If US goods cost one dollar for each euro German goods costs,the real exchange rate would be computed as how many German goods per U.S.goods?

If a U.S.shirt maker purchases cotton from Egypt,U.S.net exports

John,a U.S.citizen,opens up a Sports bar in Tokyo.This counts as U.S.

Jill uses some euros to purchase a bond issued by a French vineyard.This exchange

In an open economy,gross domestic product equals $1,950 billion,government expenditure equals $280 billion,investment equals $500,and net capital outflow equals $280 billion.What is consumption expenditure?

Paul,a U.S.citizen,builds a telescope factory in Israel.His expenditures

The large trade deficit in the United States in the 1990s is primarily associated with a rise in domestic investment rather than a rise in the budget deficit.

Sonya,a citizen of Denmark,produces boots and shoes that she sells to department stores in the United States.Other things the same,these sales

The nominal exchange rate is the

Which of the following would be U.S.foreign portfolio investment?

Suppose a country had $2.4 billion of net exports and bought $4.8 billion of goods and services from foreign countries.This country would have

Bob,a Greek citizen,opens a restaurant in Chicago.His expenditures