Exam 32: A Macroeconomic Theory of the Open Economy

In the open-economy macroeconomic model,other things the same,when a U.S.resident imports a foreign good,our model treats this as a decrease in the demand for dollars in the foreign-currency exchange market.

If there is a shortage of loanable funds,then

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

When a country suffers from capital flight,the exchange rate

Over the past two decades the U.S.has persistently had trade deficits.

U.S.corporation Titan Bikes borrows funds to build a factory in the U.S.and a factory in Denmark.Borrowing for factories in which location(s)is included in the U.S.demand for loanable funds?

In the open-economy macroeconomic model which of the following falls if there is an increase in the budget deficit?

If the U.S.imposed an import quota on apples,then which of the following would rise?

Figure 32-4 -Refer to Figure 32-4.Suppose that U.S.firms desire to purchase more capital in the U.S.The effects of this could be illustrated by

Other things the same,as the real interest rate falls

Which of the following is correct concerning the open-economy macroeconomic model?

If a government has a budget surplus,then public saving

In the open economy macroeconomic model,the amount of dollars demanded in the market for foreign-currency exchange at a given real exchange rate increases if

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

An increase in the budget deficit

A country has national saving of $70 billion,government expenditures of $20 billion,domestic investment of $30 billion,and net capital outflow of $40 billion.What is its supply of loanable funds?

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

An increase in the budget deficit

In an open economy,the demand for loanable funds comes from both domestic investment and net capital outflow.

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