Exam 18: Macroeconomics in an Open Economy

Table 18-2 -Refer to Table 18-2.Given the following exchange rates in the above table,what are the exchange rates stated as U.S.dollars per Mexican peso and U.S.dollars per British pound respectively?

Figure 18-1 -Refer to Figure 18-1.The depreciation of the euro is represented as a movement from

When the market value of the dollar falls relative to other currencies around the world,we say that

How is the impact of expansionary monetary policy different in an open economy than in a closed economy?

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

Based on the following information,calculate public saving,net foreign investment,and national income.Assume that the capital account is zero and net transfers are zero. private saving = $145 billion exports = $285 billion imports = $240 billion consumption = $600 billion private investment = $125 billion government purchases = $75 billion

Explain how "net capital flows" are related to "net foreign investment," "net foreign direct investment," and "net foreign portfolio investment."

In international exchange markets,a rise in interest rates in the United States will cause the demand for dollars to ________ and the supply of dollars to ________.

A decrease in U.S.federal government budget deficits that lowers U.S.interest rates relative to the rest of the world should

Net foreign investment minus net foreign portfolio investment is equal to

Figure 18-1 -Refer to Figure 18-1.The depreciation of the dollar is represented as a movement from

How does a decrease in value of a country's currency relative to other currencies affect its balance of trade?

Figure 18-1 -Refer to Figure 18-1.The appreciation of the dollar is represented as a movement from

The saving and investment equation holds only when the federal budget is balanced.

When the United States sends money to Indonesia to help tsunami survivors,in what account is this transaction recorded?

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

When Americans increase their demand for Japanese goods,

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

In the United States,domestic investment is greater than national saving.

How might a U.S.federal budget surplus affect the balance of trade? (Assume exchange rates are stated in terms of foreign currency per U.S.dollar.)