Exam 18: Macroeconomics in an Open Economy

What effect does a depreciation of the dollar have on real GDP in the United States in the short run?

Assuming the United States is the "domestic" country,if the real exchange rate between the United States and Russia decreases from 28 to 23

Which of the following is true about the occurrence of the twin deficits?

You're traveling 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 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.)

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

How will contractionary monetary policy in Japan affect the demand for the yen and the supply of the yen in the foreign exchange market?

According to the saving and investment equation,if net foreign investment rises by $60 million

Explain why economies with financial account surpluses usually have current account deficits.

A Canadian oil company hires geological survey services from the United States.If all else remains equal,this will

Figure 18-1 -Refer to Figure 18-1.The depreciation of the dollar is represented as a movement from

Which of the following would cause the dollar to appreciate?

If national saving increases,________.(Assume that the capital account is zero and net transfers are zero.)

Net foreign investment is equal to

The possibility that a government budget deficit will also lead to a current account deficit is an idea sometimes referred to as the twin deficits.

What impact might a decrease in the U.S.federal budget deficit have on interest rates and exchange rates in the market for the U.S.dollar? (Assume the exchange rate is stated in terms of foreign currency per U.S.dollar.)

Assuming no change in the nominal exchange rate,how will a lower rate of inflation in the United States relative to Canada affect the real exchange rate between the two countries? (Assume the United States is the "domestic" country.)

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

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

What is the difference between net exports and the current account balance?

If net exports are equal to net foreign investment,which of the following is not true?