Exam 14: Macroeconomics in an Open Economy

Figure 14.1 Alt text for Figure 14.1: In figure 14.1, a graph illustrates the quantity of dollars traded against the exchange rate. Long description for Figure 14.1: The x-axis is labelled, quantity of dollars traded, and the y-axis is labelled, exchange rate, euros against dollars.2 supply curves; S1 and S2, and two demand curves; D1 and D2 are plotted.Supply curve S1 is a straight line which slopes up from the bottom left corner to the top left corner, and passes through points A and B.Supply curve S2 is a straight line with the same slope as S1, but plotted above.S2 passes through points D and C.Demand curve D1 is a straight line, which slopes down from the top left corner to the bottom right corner.Curve D1 intersects curve S1 at point A, and curve S2 at point D.Demand curve D2 is a straight line with the same slope as D1, but plotted above.Curve D2 intersects curve S1 at point B, and curve S2 at point C. -Refer to Figure 14.1.The French fall in love with British Columbian wines and triple their purchases of this beverage.Assuming all else remains constant, this would be represented as a movement from

An increase in federal government budget deficits that raises Canadian interest rates relative to the rest of the world should

Based on the following information, what is the balance of the financial account? Exports of goods and services = $12 billion Imports of goods and services = $14 billion Net income on investments = -$4 billion Net transfers = -$1 billion Increase in foreign holdings of assets in Canada = $5 billion Increase in Canadian holdings of assets in foreign countries = -$3 billion

Figure 14.1 Alt text for Figure 14.1: In figure 14.1, a graph illustrates the quantity of dollars traded against the exchange rate. Long description for Figure 14.1: The x-axis is labelled, quantity of dollars traded, and the y-axis is labelled, exchange rate, euros against dollars.2 supply curves; S1 and S2, and two demand curves; D1 and D2 are plotted.Supply curve S1 is a straight line which slopes up from the bottom left corner to the top left corner, and passes through points A and B.Supply curve S2 is a straight line with the same slope as S1, but plotted above.S2 passes through points D and C.Demand curve D1 is a straight line, which slopes down from the top left corner to the bottom right corner.Curve D1 intersects curve S1 at point A, and curve S2 at point D.Demand curve D2 is a straight line with the same slope as D1, but plotted above.Curve D2 intersects curve S1 at point B, and curve S2 at point C. -Refer to Figure 14.1.The depreciation of the dollar is represented as a movement from

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 exchange rate is 89 yen per Canadian 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.)

The level of saving in Canada has historically been low relative to the level of domestic investment.Based on this information, we would expect that

Net foreign investment minus net foreign portfolio investment is equal to

Which of the following will not shift the demand for the euro to the right?

All else equal, a depreciation of the British pound relative to currencies such as the euro and the Canadian dollar should ________ British exports and ________ imports to Great Britain.

How will an interest rate decrease in Canada affect equilibrium in the foreign exchange market?

If national saving decreases,

If the Bank of Canada pursues an expansionary monetary policy, investment in Canada will ________, and net exports will ________.

Which of the following will shift the demand for the euro to the right?

Figure 14.4 Alt text for Figure 14.4: In figure 14.4, a graph illustrates the quantity of dollars traded against the exchange rate. Long description for Figure 14.4: The x-axis is labelled, quantity of dollars traded, and the y-axis is labelled, exchange rate, euros against dollars.2 supply curves; S1 and S2, and 2 demand curves; D1 and D2 are plotted.Supply curve S1 is a straight line which slopes up from the bottom left corner to the top right corner.It passes through points A and B.Supply curve S2 is a straight line with the same slope as curve S1, but is plotted to the right.Curve S2 passes through points D and C.Demand curve D1 is a straight line which slopes down from the top left corner to the bottom right corner.Curve D1 intersects curve S1 at point A, and curve S2 at point D.Demand curve D2 has the same slope as curve D1, but is plotted to the right Curve D2 intersects curve S1 at point B, and curve S2 at point C. -Refer to Figure 14.4.The depreciation of the euro is represented as a movement from

A decrease in capital outflows from Canada will

A Canadian hospital hires radiology services from India to cut costs.If all else remains equal, this will

If the dollar appreciates, how will aggregate demand in Canada be affected?

Ceteris paribus, a rise in interest rates in Canada will cause the yen price of the dollar in international exchange markets to ________; that is, the Canadian dollar ________ in value against the yen.

Based in the United States, IBM is a global company with about ________ of its sales coming from within the United States.

The ability of the United States to run current account deficits