Exam 18: Macroeconomics in an Open Economy

The Federal Reserve's expansionary monetary policy has kept interest rates at historic low levels in an effort to stimulate economic growth,while at the same time the central banks of some countries that are experiencing faster recoveries from the recession have begun to tighten their monetary policies.As a result,this has caused

The balance of payments includes all of the following accounts except

If you know that a country's net foreign investment is positive,what does that tell you about the relationship between the country's national saving and private investment? (Assume that the capital account is zero and net transfers are zero.)

Which of the following would you expect to decrease both interest rates and exchange rates? (Assume exchange rates are stated in terms of foreign currency per domestic currency.)

Table 29-2 -All else equal,a depreciation of the British pound relative to currencies such as the euro and the U.S.Dollar should ________ British exports and ________ imports to Great Britain.

Expansionary monetary policy lowers interest rates and forces a real appreciation of the dollar in international currency markets.

Monetary policy has a ________ effect on aggregate demand in a(n)________ economy,and fiscal policy has a ________ effect on aggregate demand in a(n)________ economy.

Which of the following would decrease net exports in the United States?

How does contractionary monetary policy affect net exports in the short run?

Ceteris paribus,an increase in the government's budget deficit will decrease the financial account surplus.

How does a decrease in the federal budget deficit affect the demand for dollars and the supply of dollars on the foreign exchange market?

A rise in the dollar price of the Chinese yuan signals an appreciation of the yuan and a depreciation of the dollar.

Ceteris paribus,a decrease in the government's budget deficit will increase domestic investment and net foreign investment.

An increase in net foreign investment is possible through a decrease in national saving or a decrease in domestic investment.

A decrease in United States net foreign direct investment would occur if

If the United States has a current account deficit and the capital account is zero,which of the following must be true?

Net foreign investment minus net foreign portfolio investment is equal to

Table 29-2 -When Americans decrease their demand for Japanese goods,

The purchase of foreign stocks and bonds by a U.S.brokerage firm is an example of capital inflows to the United States.

Which of the following is "crowded out" by higher interest rates that can be the result of expansionary fiscal policy?