Exam 18: Macroeconomics in an Open Economy

Table 18-3 -Refer to Table 18-3.Given the following exchange rates in the above table,what are the exchange rates stated as U.S.dollars per Danish krone and U.S.dollars per EU euro respectively?

Ceteris paribus,a decrease in the government's budget deficit will increase domestic investment and net foreign investment.

Which of the following will not shift the demand for the euro to the right?

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

An appreciating yen makes Japanese products

Which of the following transactions would be included in Germany's current account?

The relative price of a country's goods and services in terms of foreign goods and services is the real exchange rate.

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

Assume the United States is the "domestic" country and China is the "foreign" country.Which of the following might increase the real exchange rate between the United States and China?

You're traveling in Ireland and are thinking about buying a new digital camera.You've decided you'd be willing to pay $125 for a new camera,but cameras in Ireland are all priced in euros.If the exchange rate is 0.85 euros per dollar,what's the highest price in euros you'd be willing to pay for a camera?

What are the three main sets of factors that cause the supply and demand curves in the foreign exchange market to shift?

Ceteris paribus,an increase in the government budget deficit increases interest rates in the United States and causes a real appreciation of the dollar.

If the Fed is using policy to combat inflation,what is likely to happen in the foreign exchange market and to the foreign exchange value of the dollar?

Suppose that domestic investment in Canada is 10.7% of GDP,and Canadian national savings is 13% of GDP.What is Canada's foreign investment as a percentage of GDP?

How does an increase in the relative price of a country's goods in terms of foreign goods,or real exchange rate,affect its balance of trade?

How does an increase in government purchases financed by an increase in the deficit affect exchange rates? Support your answer with graphs of the loanable funds market and the foreign exchange market.

If the United States has a net export surplus,which of the following must be true?

The price of ________ in terms of ________ is referred to as the real exchange rate.

If the exchange rate between the Mexican peso and the U.S.dollar expressed in terms of pesos per dollar is 13.5 pesos = 1 dollar,what is the exchange rate when expressed in terms of dollars per peso?

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