Exam 15: International and Balance of Payments Issues in the Macro Economy

Borrowing from abroad represents:

Capital inflows occur if foreign interest rates are greater than domestic interest rates.

In the foreign exchange market,a balance of payments deficit is represented by:

Lending abroad represents:

The political stability of countries has an impact on the foreign exchange market.

An index of the weighted exchange value of the U.S.dollar versus the currencies of a broad group of major U.S.trading partners is called the trade-weighted dollar.

You are given the following information. Compute net exports,net capital flows,and the balance of payments.

A trade surplus exists if export spending is less than import spending.

In the foreign exchange market,the quantity U.S.dollars supplied is a function of:

Under a fixed exchange rate system,a central bank's intervention in the foreign exchange market will not affect the domestic money supply.

In an open mixed economy,injections are saving,taxation,and import spending.

Capital outflows occur if:

In February 2002,the euro/dollar exchange rate was 1.20,and in May 2002,the euro/dollar exchange rate was 1.10.What happened to the exchange rate during this period?

Exports are:

Holding everything else constant,a country's exports will decrease if the:

In the foreign exchange market,the quantity supplied of dollars is 300 whereas the quantity demanded of dollars is 500 results in a:

Capital inflows occur if:

A trade surplus means:

Borrowing from another country that occurs when the country has a trade deficit and its citizens sell real and financial assets to foreigners is called a capital inflow.

A trade deficit means: