Question 1

A country with negative net exports has a trade surplus.

Accepted Answer

A) True 
 B)False

Question 2

The country of Sylvania has a GDP of $900,investment of $200,government purchases of $200,and net capital outflow of negative $100.This means that

Accepted Answer

A) consumption equals $700. 
B) consumption equals $600. 
C) consumption equals $500. 
D) saving equals $300. 
A) consumption equals $700. 
B) consumption equals $600. 
C) consumption equals $500. 
D) saving equals $300.

Question 3

If the U.S.real exchange rate appreciates,U.S.net exports

Accepted Answer

A) increase and U.S.net capital outflow decreases. 
B) decrease and U.S.net capital outflow increases. 
C) and U.S.net capital outflow both increase. 
D) and U.S.net capital outflow both decrease. 
A) increase and U.S.net capital outflow decreases. 
B) decrease and U.S.net capital outflow increases. 
C) and U.S.net capital outflow both increase. 
D) and U.S.net capital outflow both decrease.

Question 4

The increase in international trade in the United States is partly due to

Accepted Answer

A) improvements in transportation. 
B) advances in telecommunications. 
C) increased trade of goods with a high value per pound. 
D) All of the above are correct. 
A) improvements in transportation. 
B) advances in telecommunications. 
C) increased trade of goods with a high value per pound. 
D) All of the above are correct.

Question 5

Sue,a U.S.citizen,buys stock in an Italian automobile corporation.Her purchase counts as

Accepted Answer

A) investment for Sue and U.S.foreign direct investment. 
B) investment for Sue and U.S.foreign portfolio investment. 
C) saving for Sue and U.S.foreign direct investment. 
D) saving for Sue and U.S.foreign portfolio investment. 
A) investment for Sue and U.S.foreign direct investment. 
B) investment for Sue and U.S.foreign portfolio investment. 
C) saving for Sue and U.S.foreign direct investment. 
D) saving for Sue and U.S.foreign portfolio investment.

Question 6

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

Accepted Answer

A) A Swedish car manufacturer opens a plant in Tennessee. 
B) A Dutch citizen buys shares of stock in a U.S.company. 
C) A U.S.based hotel chain opens a new hotel in Brazil. 
D) A U.S.citizen buys stock in companies located in Japan. 
A) A Swedish car manufacturer opens a plant in Tennessee. 
B) A Dutch citizen buys shares of stock in a U.S.company. 
C) A U.S.based hotel chain opens a new hotel in Brazil. 
D) A U.S.citizen buys stock in companies located in Japan.

Question 7

If you were told that the exchange rate was 1.2 Canadian dollars per U.S.dollar,a watch that costs $12 US dollars would cost

Accepted Answer

A) $8.5 Canadian dollars. 
B) $10 Canadian dollars. 
C) $12.20 Canadian dollars. 
D) $14.40 Canadian dollars. 
A) $8.5 Canadian dollars. 
B) $10 Canadian dollars. 
C) $12.20 Canadian dollars. 
D) $14.40 Canadian dollars.

Question 8

A country sells more to foreign countries than it buys from them.It has

Accepted Answer

A) a trade surplus and positive net exports. 
B) a trade surplus and negative net exports. 
C) a trade deficit and positive net exports. 
D) a trade deficit and negative net exports. 
A) a trade surplus and positive net exports. 
B) a trade surplus and negative net exports. 
C) a trade deficit and positive net exports. 
D) a trade deficit and negative net exports.

Question 9

When Microsoft establishes a distribution center in France,U.S.net capital outflow

Accepted Answer

A) increases because Microsoft makes a portfolio investment in France. 
B) decreases because Microsoft makes a portfolio investment in France. 
C) increases because Microsoft makes a direct investment in capital in France. 
D) decreases because Microsoft makes a direct investment in capital France. 
A) increases because Microsoft makes a portfolio investment in France. 
B) decreases because Microsoft makes a portfolio investment in France. 
C) increases because Microsoft makes a direct investment in capital in France. 
D) decreases because Microsoft makes a direct investment in capital France.

Question 10

For many macroeconomic questions concerning large economies,international issues are not of primary importance.

Accepted Answer

A) True 
 B)False

Question 11

Net exports of a country are the value of

Accepted Answer

A) goods and services imported minus the value of goods and services exported. 
B) goods and services exported minus the value of goods and services imported. 
C) goods exported minus the value of goods imported. 
D) goods imported minus the value of goods exported. 
A) goods and services imported minus the value of goods and services exported. 
B) goods and services exported minus the value of goods and services imported. 
C) goods exported minus the value of goods imported. 
D) goods imported minus the value of goods exported.

Question 12

Other things the same,if the exchange rate changes from .30 Kuwaiti dinar per dollar to .35 Kuwaiti dinar per dollar,the dollar has

Accepted Answer

A) appreciated and so buys more Kuwaiti goods. 
B) appreciated and so buys fewer Kuwaiti goods. 
C) depreciated and so buys more Kuwaiti goods. 
D) depreciated and so buys fewer Kuwaiti goods. 
A) appreciated and so buys more Kuwaiti goods. 
B) appreciated and so buys fewer Kuwaiti goods. 
C) depreciated and so buys more Kuwaiti goods. 
D) depreciated and so buys fewer Kuwaiti goods.

Question 13

If a country sells more goods and services abroad than it purchases abroad,it has positive net exports and a trade surplus.

Accepted Answer

A) True 
 B)False

Question 14

When Ghana sells chocolate to the United States,U.S.net exports

Accepted Answer

A) increase, and U.S.net capital outflow increases. 
B) increase, and U.S.net capital outflow decreases. 
C) decrease, and U.S.net capital outflow increases. 
D) decrease, and U.S.net capital outflow decreases. 
A) increase, and U.S.net capital outflow increases. 
B) increase, and U.S.net capital outflow decreases. 
C) decrease, and U.S.net capital outflow increases. 
D) decrease, and U.S.net capital outflow decreases.

Question 15

Use the (hypothetical) information in the following table to answer the following questions.
Table 31-1
  
-Refer to Table 31-1.In real terms,U.S.goods are less expensive than goods in which country(ies)?

Accepted Answer

A) Bolivia and Morocco 
B) Japan, Norway, and Thailand 
C) Japan and Norway 
D) Thailand 
A) Bolivia and Morocco 
B) Japan, Norway, and Thailand 
C) Japan and Norway 
D) Thailand

Question 16

Net capital outflow measures

Accepted Answer

A) foreign assets held by domestic residents minus domestic assets held by foreign residents. 
B) the imbalance between the amount of foreign assets bought by domestic residents and the amount of domestic assets bought by foreigners. 
C) the imbalance between the amount of foreign assets bought by domestic residents and the amount of domestic goods and services sold to foreigners. 
D) None of the above is correct. 
A) foreign assets held by domestic residents minus domestic assets held by foreign residents. 
B) the imbalance between the amount of foreign assets bought by domestic residents and the amount of domestic assets bought by foreigners. 
C) the imbalance between the amount of foreign assets bought by domestic residents and the amount of domestic goods and services sold to foreigners. 
D) None of the above is correct.

Question 17

A country has $100 million of net exports and $170 million of saving.Net capital outflow is

Accepted Answer

A) $70 million and domestic investment is $170 million. 
B) $70 million and domestic investment is $270 million. 
C) $100 million and domestic investment is $70 million. 
D) None of the above is correct. 
A) $70 million and domestic investment is $170 million. 
B) $70 million and domestic investment is $270 million. 
C) $100 million and domestic investment is $70 million. 
D) None of the above is correct.

Question 18

A Venezuelan firm purchases earth-moving equipment from a U.S.company and pays for it with Venezuelan currency.This transaction

Accepted Answer

A) increases U.S.net exports, and increases Venezuelan net capital outflow. 
B) increases U.S.net exports, and decreases Venezuelan net capital outflow. 
C) decreases U.S.net exports, and increases Venezuelan net capital outflow. 
D) decreases U.S.net exports, and decreases Venezuelan net capital outflow. 
A) increases U.S.net exports, and increases Venezuelan net capital outflow. 
B) increases U.S.net exports, and decreases Venezuelan net capital outflow. 
C) decreases U.S.net exports, and increases Venezuelan net capital outflow. 
D) decreases U.S.net exports, and decreases Venezuelan net capital outflow.

Question 19

Which of the following is correct? Over about the last fifty years

Accepted Answer

A) U.S.exports and U.S.imports each about doubled. 
B) U.S.exports and U.S.imports each about tripled. 
C) U.S.exports about doubled and U.S.imports about tripled. 
D) U.S.exports about tripled and U.S.imports about doubled. 
A) U.S.exports and U.S.imports each about doubled. 
B) U.S.exports and U.S.imports each about tripled. 
C) U.S.exports about doubled and U.S.imports about tripled. 
D) U.S.exports about tripled and U.S.imports about doubled.

Question 20

Given the fact that citizens of a country are not saving much,it is better to

Accepted Answer

A) force citizens to save. 
B) reduce investment. 
C) have foreigners invest in the domestic economy than no one at all. 
D) to prevent opportunities for citizens to buy capital assets abroad. 
A) force citizens to save. 
B) reduce investment. 
C) have foreigners invest in the domestic economy than no one at all. 
D) to prevent opportunities for citizens to buy capital assets abroad.

Exam 31: Open-Economy Macroeconomics: Basic Concepts

A country with negative net exports has a trade surplus.

The country of Sylvania has a GDP of $900,investment of $200,government purchases of $200,and net capital outflow of negative $100.This means that

If the U.S.real exchange rate appreciates,U.S.net exports

The increase in international trade in the United States is partly due to

Sue,a U.S.citizen,buys stock in an Italian automobile corporation.Her purchase counts as

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

If you were told that the exchange rate was 1.2 Canadian dollars per U.S.dollar,a watch that costs $12 US dollars would cost

A country sells more to foreign countries than it buys from them.It has

When Microsoft establishes a distribution center in France,U.S.net capital outflow

For many macroeconomic questions concerning large economies,international issues are not of primary importance.

Net exports of a country are the value of

Other things the same,if the exchange rate changes from .30 Kuwaiti dinar per dollar to .35 Kuwaiti dinar per dollar,the dollar has

If a country sells more goods and services abroad than it purchases abroad,it has positive net exports and a trade surplus.

When Ghana sells chocolate to the United States,U.S.net exports

Use the (hypothetical) information in the following table to answer the following questions. Table 31-1 -Refer to Table 31-1.In real terms,U.S.goods are less expensive than goods in which country(ies)?

Net capital outflow measures

A country has $100 million of net exports and $170 million of saving.Net capital outflow is

A Venezuelan firm purchases earth-moving equipment from a U.S.company and pays for it with Venezuelan currency.This transaction

Which of the following is correct? Over about the last fifty years

Given the fact that citizens of a country are not saving much,it is better to

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Applications

Supply, demand, and Government Policies

Consumers, producers, and the Efficiency of Markets

Application: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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