Exam 20: Macroeconomics in an Open Economy

If Australian 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. _____________________________________________________________________________________________ _____________________________________________________________________________________________

Which of the following is not a non-produced,non-financial asset?

Limits on the flow of foreign exchange and financial investment across countries are called ________.

What was the General Agreement on Tariffs and Trade (GATT)? What did it accomplish? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Refer to Figure 20.2 for the following questions. Figure 20.2 -Refer to Figure 20.2.Suppose that Italians reduce their demand for Australian steel by half.Assuming all else remains constant,this would be represented as a movement from ________.

Net exports in Australia are negative so Australia must be a net lender abroad.

Under the Bretton Woods System,the par rate per British pound was defined as a fixed number of US dollars per pound.If this were set above its equilibrium value,then

The 'current account balance' is defined as _________.

In an open economy,contractionary monetary policy will have a secondary effect on GDP because

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

All of the following explain why purchasing power parity does not completely explain long-run fluctuations in exchange rates,except:

If one US dollar could be exchanged for one Australian dollar in 1970,and one US dollar can now be exchanged for 1.27 Australian dollars,which of the following is true?

In a pegged exchange rate system,a country will peg the value of its currency to

The anchoring feature of the Bretton Woods System was the

If the balance on the current account is $8.42 billion and the balance on the financial account is $7.53 billion,what is the balance on the capital account,assuming no statistical discrepancy?

If inflation in Australia is higher than inflation in Japan,what will happen to the exchange rate between the Australian dollar and the Japanese yen in the long run,ceteris paribus?

An economy that does not have interactions in trade or finance with other economies is referred to as _________.

Under the 'gold standard',the government must have enough gold to back up any

Monetary policy has a ________ effect on aggregate demand in a(n)________ economy,and fiscal policy has a ________ effect on aggregate demand in a(n)________ economy.

The trade weighted index (TWI)is a measure of the