Exam 18: Macroeconomics in an Open Economy

The balance of trade includes trade in

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

Why is the multiplier for contractionary fiscal policy smaller in an open economy?

If a country has a fixed exchange rate,

Ceteris paribus,a real depreciation of the dollar will decrease net exports in the United States.

If the United States has a net export deficit,which of the following must be true? (Assume that the capital account is zero and net transfers are zero.)

Which of the following is not "crowded out" by higher interest rates as a result of expansionary fiscal policy?

When Americans decrease their demand for Japanese goods,

According to the saving and investment equation,if net foreign investment falls by $35 million,

If the United States has a current account deficit and the capital account is zero,which of the following must be true?

How would a decrease in the U.S.budget deficit affect the exchange rate in the market for dollars?

Contractionary monetary policy and expansionary fiscal policy both reduce net exports in an open economy.

Suppose China decides to sell a vast majority of their large holdings of U.S.Treasury bonds.If you are thinking of refinancing your house,how would China's action affect your decision to refinance?

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

An open economy is an economy that has

Which of the following would result in a trade surplus for the United States?

When net capital flows are positive,

An increase in the demand for American-made goods will

Ceteris paribus,an increase in the government's budget deficit will increase the current account deficit.

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