Exam 18: Macroeconomics in an Open Economy

Which of the following would increase the current account balance of the United States?

Which of the following is not included in the balance of the financial account of the United States?

If the balance on the current account in the United States is $750 billion,which of the following is most likely to be true?

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

The United States usually exports ________ goods than it imports and exports ________ services than it imports.

A decrease in capital outflows from the United States will

Investment (I)in the United States may increase with either an increase in national saving or an increase in net foreign investment.

Which of the following equations is true in an open economy?

If the current account is in surplus and the capital account is zero,then

The large budget deficits of the early 1990s resulted in large current account deficits.

When exchange rates are not determined in the market but are instead set by a country's central bank,we say that the country's exchange rate is

Figure 18-1 -Refer to Figure 18-1.Currency speculators believe that the value of the euro will increase relative to the dollar.Assuming all else remains constant,how would this be represented?

Fiscal policy has a greater impact in a closed economy than it does in an open economy.

Why is the balance of payments always zero?

If net exports are equal to net foreign investment

Following a tax cut by government,domestic investment will ________ and net exports will ________.

Currency traders expect the dollar to appreciate.What impact will this have on equilibrium in the foreign exchange market?