Exam 16: Money in the Open Economy

A principal reason that purchasing power parity does not hold exactly in practice is

What is the major problem in a currency union?

In the monetary small open-economy model with a flexible exchange rate,an increase in the exchange rate has which impact on domestic money demand?

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

In the monetary small open-economy model with a flexible exchange rate,an increase in the foreign price level decreases

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

The balance of payments equals

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

The nominal exchange rate is the

In the New Keynesian open economy model,suppose the exchange rate is flexible and there is a decline in total factor productivity

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

To maintain a fixed exchange rate,authorities

In the New Keynesian open economy model

In the New Keynesian open economy model,if the exchange rate is fixed

In response to a temporary change in total factor productivity,the adoption of capital controls under a fixed exchange rate

The supply of euros is managed by

In the monetary small open-economy model,a flexible exchange rate insulates the domestic price level from

A capital inflow occurs when a

A hard peg may be achieved by all of the following except

In the monetary small open-economy model with a fixed exchange rate,an increase in the world real interest rate