Exam 32: A Macroeconomic Theory of the Open Economy

Explain how the relation between the real exchange rate and net exports explains the downward slope of the demand for foreign-currency exchange curve.

If there is a surplus of loanable funds,the quantity demanded is

Trade policies

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

According to the open-economy macroeconomic model,if the U.S.government budget deficit increases,then both U.S.domestic investment and U.S.net capital outflow would decrease.

In the open-economy macroeconomic model,the supply of loanable funds comes from

Suppose that U.S.investors decide that investment opportunities in African countries have improved.What happens to U.S.net capital outflow? What happens to the U.S.real interest rate?

When Mexico suffered from capital flight in 1994,Mexico's net capital outflow

In an open economy,the demand for loanable funds comes from

If a country experiences capital flight,which of the following curves shift right?

If the government of Peru increased its budget deficit,then domestic investment

If a government of a country with a zero trade balance increases its budget deficit,then the real exchange rate

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

Figure 32-1 -Refer to Figure 32-1.In the Figure shown,if the real interest rate is 6 percent,there will be pressure for

Suppose that Egypt has a government budget surplus,and then goes into deficit.This change would

If the U.S.were to impose import quotas

If a country had capital flight,then the real exchange rate would

If a country's budget deficit increases,then in the foreign exchange market,

Other things the same,a lower real interest rate decreases the quantity of

An increase in the budget deficit causes net capital outflow to