Exam 14: Macroeconomics in an Open Economy

If Canadian demand for purchases of British goods has decreased, how would you expect the equilibrium exchange rate in the market for Canadian dollars to respond? Support your answer graphically.

Which of the following would result in positive net exports for Canada?

Table 14.3 -Refer to Table 14.3.Given the exchange rates in the above table, what are the exchange rates stated as Canadian dollars per Danish krone and Canadian dollars per EU euro, respectively?

Based on the following information, what is the balance on the current account? Exports of goods and services = $5 billion Imports of goods and services = $3 billion Net income on investments = -$2 billion Net transfers = -$2 billion Increase in foreign holdings of assets in Canada = $4 billion Increase in Canadian holdings of assets in foreign countries = -$1 billion

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.)

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

Currency traders expect the Canadian dollar to depreciate.What impact will this have on equilibrium in the foreign exchange market?

If the government finances an increase in government purchases with an increase in taxes, which of the following would you expect to see?

Why does continued foreign investment in U.S.stocks and bonds, and foreign companies continuing to build factories in the United States, result in a current account deficit in the United States?

The difference between the value of the goods a country exports and the value of the goods a country imports is the country's

When a foreign investor buys a bond issued in Canada,

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

What's the difference between the nominal exchange rate and the real exchange rate?

Contractionary monetary policy should increase foreign financial investment in Canada.

What happens to national saving when the government runs a budget surplus? What happens to national saving when the government runs a budget deficit?

Which of the following would decrease net exports in Canada?

If the price level in Canada is 110, the price level is 120 in Mexico, and the nominal exchange rate is 140 pesos per dollar, what is the real exchange rate from the Canadian perspective?

You're travelling 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 kimono you're looking at costs 14,000 yen, under which of the following exchange rates would you be willing to purchase the kimono? (Assume no taxes or duties are associated with the purchase.)

Investment (I)in Canada may increase with either an increase in national saving or an increase in net foreign investment.

What is the relationship between the balance of trade and the current account balance?