Exam 18: Macroeconomics in an Open Economy

Suppose China decides to sell a vast majority of their large holdings of U.S.Treasury bonds.If you are thinking of refinancing your house,how would China's action affect your decision to refinance?

If the United States has a net export surplus,which of the following must be true?

Expansionary monetary policy will have what effect on the components of aggregate demand?

Which of the following is true about the occurrence of the twin deficits?

According to the saving and investment equation,if net foreign investment rises by $60 million,

Contractionary monetary policy should increase foreign financial investment in the United States.

Expansionary fiscal policy should raise the exchange rate of the dollar.

Holding all else constant,a rise in interest rates in the United States will cause the dollar to appreciate in international exchange markets.

The United States usually exports ________ goods than it imports and exports ________ services than it imports.

The saving and investment equation holds only when the federal budget is balanced.

Figure 29-1 -Refer to Figure 29-1.Currency speculators believe that the value of the euro will increase relative to the dollar.Assuming all else remains constant,how would this be represented?

If net exports are positive for China,it must be true that China is experiencing net outflows of capital.

Which of the following equations is true in an open economy?

You're traveling in Ireland and are thinking about buying a new digital camera.You've decided you'd be willing to pay $125 for a new camera,but cameras in Ireland are all priced in euros.If the camera you're looking at costs 115 euros,under which of the following exchange rates would you be willing to purchase the camera? (Assume no taxes or duties are associated with the purchase.)

The recession of 2007-2009 decreased the demand for imports in Japan,which caused the ________ curve for the yen to ________,increasing the exchange rate and the value of the yen.

When Americans increase their demand for Japanese goods,

If net foreign investment is negative,which of the following must be true?

An increase in the government budget deficit will not lead to a current account deficit if domestic investment declines.

The price of domestic goods in terms of foreign goods is referred to as

What impact might an increase in the budget deficit have on interest rates and exchange rates?