Exam 19: A Macroeconomic Theory of the Open Economy

In the open-economy macroeconomic model, if the supply of loanable funds shifts right, then

When the U.S. real exchange rate appreciates, U.S. goods become

When a country imposes an import quota, its

If the U.S. government imposes an import quota on French wine, U.S. net exports will

A limit on the quantity of a good produced abroad that can be purchased domestically is called a(n)

If a government increases its budget deficit, then interest rates

An increase in the U.S. government budget deficit shifts the

If the quantity of loanable funds supplied is less than the quantity demanded, then

The diagram below represents the market for loanable funds and the market for foreign-currency exchange in Mexico. Use the diagram to answer the following questions.Figure 19-7 -Refer to Figure 19-7. Which of the following is consistent with capital flight from Mexico?

In the open-economy macroeconomic model, the key determinant of net capital outflow is the

The open-economy macroeconomic model includes

In the open-economy macroeconomic model, as the exchange rate rises,

An increase in the budget deficit

In the open-economy macroeconomic model, the purchase of a capital asset by domestic residents adds to the demand for loanable funds

If the U.S. government imposes a quota on toy imports, then net exports of U.S. toys would

Which of the following would make both the equilibrium real interest rate and the equilibrium quantity of loanable funds decrease?

An increase in the budget deficit

When a country suffers from capital flight, the exchange rate

Other things the same, as the real interest rate falls

When the government budget deficit increases, national saving increases.