Exam 32: A Macroeconomic Theory of the Open Economy

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

Which of the following could explain a decrease in the U.S.real exchange rate?

Which of the following is most likely to increase exports?

The primary focus of the open-economy macroeconomic model is the determination of GDP and the price level.

If net exports are negative,then

Suppose that the U.S.imposes an import quota on lumber.The quota makes the real exchange rate of the U.S.dollar

In the open-economy macroeconomic model,the quantity of dollars demanded in the market for foreign-currency exchange

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

Suppose that U.S.citizens start saving more.What does this imply about the supply of loanable funds and the equilibrium real interest rate? What happens to the real exchange rate?

In the open-economy macroeconomic model,if net capital outflow increases then

If a government increases its budget deficit,then interest rates

Because depreciation of the real exchange rate of the dollar increases U.S.net exports,the demand curve for dollars in the foreign-currency exchange market is downward sloping.

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

A drop in the French real interest rate reduces French net capital outflow.

The open-economy macroeconomic model takes

If the budget deficit increases,then

In the open-economy macroeconomic model,the market for loanable funds equates national saving with

Refer to Figure 32-6.If equilibrium were at point h and the government imposed quotas on imports of toys and textiles the equilibrium would move to

If a country has a positive net capital outflow,then

According to the open-economy macroeconomic model,a decrease in the U.S.government budget deficit increases U.S.net capital outflow,causes the real exchange rate of the dollar to depreciate,and increases U.S.net exports.