Exam 16: International Trade in Goods and Assets

Purchasing power parity holds if

A devaluation of the exchange rate is a policy action that

According to purchasing power parity,the relationship among the domestic price (P),the foreign price (P ),and the nominal exchange rate (e),can be written as

In the monetary small open-economy model with a flexible exchange rate,an increase in the domestic money supply increases

A hard peg may be achieved by

In the monetary small open-economy model with a flexible exchange rate,an increase in the domestic money supply causes

Dollarization is a policy action that

The acquisition of a domestic financial asset by a foreign resident is called

A revaluation of the exchange rate is a policy action that

Research on capital controls in Chile show that

The International Monetary Fund plays the key role of

A capital inflow occurs when a

Over the period from 1989-2002,an examination of purchasing power parity between the United States and Canada shows that

During the 2008-2009 financial crises,the U.S.exchange rate

In an open economy,the law of one price implies that

Adoption of a currency board

Under a flexible exchange rate,an increase in the domestic money supply leads to

The adoption of capital controls makes

An agreement among countries to adopt a common currency is called a

For a country with a fixed exchange rate,foreign exchange reserves are