Exam 18: Open Economy Macroeconomics Basic Concepts: Part A

A country had a net capital outflow of $1.5 trillion and imports of $0.5 trillion.What was the value of its exports?

In the U.S.a delivery van costs $30,000.In Uruguay the same delivery van costs 720,000 pesos.The nominal exchange rate is 20 pesos per dollar. A.Find the real exchange rate.Show your work. B.In terms of dollars where is the television cheaper?

Over the last 5 years the amount of country A's currency it took to buy a unit of country B's currency more than doubled. A.Did country A's currency depreciate or appreciate? B.According to purchasing-power parity,what explains the change in the value of country B's currency?

The nominal exchange rate is 90 Pakistani rupees per dollar.The price of a shirt in Pakistan is 1800 rupees.The same shirt sells for $25 in the U.S. A.What is the real exchange rate? Show your work. B.Can arbitragers make a profit? C.If your answer to C is yes,where would they buy and where would they sell?

In the U.S.a box of tea costs $5.The same box of tea in Uganda costs 10,000 schillings (the currency of Uganda).If the real exchange rate is 5/4,what is the nominal exchange rate? Show your work.

Last year a country purchased $1.5 trillion worth of goods and services from foreign countries,sold $2 trillion worth of goods and services to foreign countries and had national saving of $1.25 trillion.What was the value of its domestic investment? Show your work.

Derive the relation between savings,domestic investment,and net capital outflow using the national income accounting identity.