Exam 18: Macroeconomics in an Open Economy

Based on the following information,calculate public saving,net foreign investment,and national income.Assume that the capital account is zero and net transfers are zero. private saving = $145 billion exports = $285 billion imports = $240 billion consumption = $600 billion private investment = $125 billion government purchases = $75 billion

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Question 1

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Based on the macroeconomic equation for national income,Y = C + I + G + NX = 600 + 125 + 75 + 45 = $845 billion.Since net exports are $45 billion,net foreign investment must also be $45 billion.According to the saving and investment equation,national saving = domestic investment plus net foreign investment.Based on the numbers provided,domestic investment plus net foreign investment = $125 billion + $45 billion = $170 billion.This $170 billion comes from private and public saving.Since private saving is $145 billion,it must be the case that public saving is $25 billion,so the government is running a budget surplus of $25 billion.

Table 29-2 -Refer to Table 29-2. Given the following exchange rates in the above table,what are the exchange rates stated as U.S.dollars per Danish krone and U.S.dollars per EU euro respectively?

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Question 2

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Table 29-2 -A decrease in the demand for American-made goods will

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Question 3

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A decision by foreign central banks to sell their holdings of U.S.Treasury bonds will

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Question 4

If net foreign investment is positive,which of the following must be true? (Assume that the capital account is zero and net transfers are zero.)

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Question 5

Figure 29-1 -How does an increase in the relative price of a country's goods in terms of foreign goods,or real exchange rate,affect its balance of trade?

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Question 6

Table 29-2 -Which of the following would cause the dollar to depreciate?

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Question 7

Use the saving and investment equation to explain why the United States experienced large current account deficits in the late 1990s.

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Question 8

If net exports are negative,

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Question 9

Assuming the United States is the "domestic" country,if the real exchange rate between the United States and Russia decreases from 28 to 23,

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Question 10

Expansionary fiscal policy crowds out both domestic investment and net exports.

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Question 11

How is the impact of expansionary monetary policy different in an open economy than in a closed economy?

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Question 12

If net exports are equal to net foreign investment,

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Question 13

The deepening of the financial crisis in the fall of 2008

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Question 14

In recent decades the United States has incurred overall balance of payments deficits.

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Question 15

When the United States sends money to the Philippines to help typhoon survivors,the transaction is recorded in

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Question 16

The price of in terms of is referred to as the real exchange rate.

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Question 17

What are the three main sets of factors that cause the supply and demand curves in the foreign exchange market to shift?

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Question 18

Why is the U.S.trade deficit almost always larger than the U.S.current account deficit?

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Question 19

Figure 29-2 -You're traveling in Japan and are thinking about buying a new kimono.You've decided you'd be willing to pay $175 for a new kimono,but kimonos in Japan are all priced in yen.If the exchange rate is 89 yen per dollar,what is the highest price in yen you'd be willing to pay for a kimono? (Assume no taxes or duties are associated with the purchase.)

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Question 20

Showing 1 - 20 of 142

Table 29-2 -Refer to Table 29-2. Given the following exchange rates in the above table,what are the exchange rates stated as U.S.dollars per Danish krone and U.S.dollars per EU euro respectively?

Table 29-2 -A decrease in the demand for American-made goods will

A decision by foreign central banks to sell their holdings of U.S.Treasury bonds will

If net foreign investment is positive,which of the following must be true? (Assume that the capital account is zero and net transfers are zero.)

Figure 29-1 -How does an increase in the relative price of a country's goods in terms of foreign goods,or real exchange rate,affect its balance of trade?

Table 29-2 -Which of the following would cause the dollar to depreciate?

Use the saving and investment equation to explain why the United States experienced large current account deficits in the late 1990s.

If net exports are negative,

Assuming the United States is the "domestic" country,if the real exchange rate between the United States and Russia decreases from 28 to 23,

Expansionary fiscal policy crowds out both domestic investment and net exports.

How is the impact of expansionary monetary policy different in an open economy than in a closed economy?

If net exports are equal to net foreign investment,

The deepening of the financial crisis in the fall of 2008

In recent decades the United States has incurred overall balance of payments deficits.

When the United States sends money to the Philippines to help typhoon survivors,the transaction is recorded in

The price of in terms of is referred to as the real exchange rate.

What are the three main sets of factors that cause the supply and demand curves in the foreign exchange market to shift?

Why is the U.S.trade deficit almost always larger than the U.S.current account deficit?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

The International Financial System

Filters

Exam 18: Macroeconomics in an Open Economy

Table 29-2 -Refer to Table 29-2. Given the following exchange rates in the above table,what are the exchange rates stated as U.S.dollars per Danish krone and U.S.dollars per EU euro respectively?

Table 29-2 -A decrease in the demand for American-made goods will

A decision by foreign central banks to sell their holdings of U.S.Treasury bonds will

If net foreign investment is positive,which of the following must be true? (Assume that the capital account is zero and net transfers are zero.)

Figure 29-1 -How does an increase in the relative price of a country's goods in terms of foreign goods,or real exchange rate,affect its balance of trade?

Table 29-2 -Which of the following would cause the dollar to depreciate?

Use the saving and investment equation to explain why the United States experienced large current account deficits in the late 1990s.

If net exports are negative,

Assuming the United States is the "domestic" country,if the real exchange rate between the United States and Russia decreases from 28 to 23,

Expansionary fiscal policy crowds out both domestic investment and net exports.

How is the impact of expansionary monetary policy different in an open economy than in a closed economy?

If net exports are equal to net foreign investment,

The deepening of the financial crisis in the fall of 2008

In recent decades the United States has incurred overall balance of payments deficits.

When the United States sends money to the Philippines to help typhoon survivors,the transaction is recorded in

The price of ________ in terms of ________ is referred to as the real exchange rate.

What are the three main sets of factors that cause the supply and demand curves in the foreign exchange market to shift?

Why is the U.S.trade deficit almost always larger than the U.S.current account deficit?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

The International Financial System

Filters

The price of in terms of is referred to as the real exchange rate.