Exam 29: Macroeconomics in an Open Economy

Suppose the majority of the shares of Ford stock were sold to a Japanese firm. Assuming all else remains constant, this will

Table 29-3 -Refer to Table 29-3. Given the following exchange rates in the above table, what are the exchange rates stated as U.S. dollars per Danish krone and U.S. dollars per EU euro respectively?

Suppose the government cuts taxes. We would expect interest rates to ________ and the dollar to ________ in foreign exchange markets.

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

If the exchange rate changes from $2.00 = 1 euro to $1.98 = 1 euro then

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 ________.

Expansionary fiscal policy should raise the exchange rate of the dollar.

You're traveling in Ireland and are thinking about buying a new digital camera. You've decided you'd be willing to pay $125 for a new camera, but cameras in Ireland are all priced in euros. If the camera you're looking at costs 115 euros, under which of the following exchange rates would you be willing to purchase the camera? (Assume no taxes or duties are associated with the purchase.)

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

Net foreign investment is a measure of net capital outflows, equal to capital outflows minus capital inflows in a given period of accounting.

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.

Why does continued foreign investment in U.S. stocks and bonds and foreign companies continuing to build factories in the United States result in a current account deficit in the United States?

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

Since 1999, the capital account has recorded

Figure 29-1 -Refer to Figure 29-1. The depreciation of the dollar is represented as a movement from

If net exports are equal to net foreign investment, which of the following is not true?

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.)

Why is the U.S. trade deficit almost always larger than the U.S. current account deficit?

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

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