Exam 32: A Macroeconomic Theory of the Open Economy

In the open-economy macroeconomic model,the supply of loanable funds comes from

Which of the following would tend to shift the supply of dollars in the market for foreign-currency exchange in the open-economy macroeconomic model to the right?

The variable that links the market for loanable funds and the market for foreign-currency exchange is

In 2002 it looked like the Argentinean government might default on its debt (which eventually it did).The open-economy macroeconomic model predicts that this should have

When a country suffers from capital flight,the demand for loanable funds in that country shifts

If a country went from a government budget deficit to a surplus,

-Refer to Figure 32-5.If the economy were originally in equilibrium at a and g and the government removed import quotas on toys and textiles the economy would move to

From 1980 to 1987,U.S.net capital outflows decreased.According to the open-economy macroeconomic model,which of the following could have caused this?

The open-economy macroeconomic model includes

In the open-economy macroeconomic model,at the equilibrium real interest rate,the amount that people (including government)want to save exactly balances desired domestic investment.

Explain how the relation between the real exchange rate and net exports explains the downward slope of the demand for foreign-currency exchange curve.

In the open-economy macroeconomic model,if the supply of loanable funds increases,net capital outflow

Figure 32-1 -Refer to Figure 32-1.In the Figure shown,if the real interest rate is 1 percent,there will be pressure for

If the government of a country with a zero trade balances increases its budget deficit,then interest rates

From 2001 to 2004,the U.S.government went from a budget surplus to a budget deficit.Other things the same,this would have decreased

In the open-economy macroeconomic model,other things the same,when a U.S.resident imports a foreign good,our model treats this as a decrease in the demand for dollars in the foreign-currency exchange market.

If a U.S.resident wants to buy a foreign bond,his actions are included

At a given real exchange rate,which of the following,by itself,would increase the supply of dollars in the market for foreign-currency exchange?

Suppose the U.S.imposes an import quota on steel.U.S.exports

Figure 32-1 -Refer to Figure 32-1.In the Figure shown,if the real interest rate is 1 percent,there will be a