Exam 19: A Macroeconomic Theory of the Open Economy: How Policies and Events Affect an Open Economy

Which of the following contains a list only of things that decrease when the budget deficit of the U.S.increases?

If a country raises its budget deficit then

Figure 32-7 Refer to this diagram of the open-economy macroeconomic model of the Mexican economy to answer the questions below. -Refer to Figure 32-7.Suppose that the Mexican economy starts at r2 and e3.Which of the following is consistent with the effects of capital flight?

If the U.S.government imposes a quota on leather shoes,then net exports of U.S.shoes would

A government budget deficit

If the U.S.imposed an import quota on corn,then in the U.S.

If a country's budget deficit increases,then in the market for foreign-currency exchange,

In the market for foreign-currency exchange,capital flight shifts

Because a government budget deficit represents

If a country removed an import quota on cotton,then overall that country's

Which of the following is the most accurate statement?

An increase in the budget deficit causes domestic interest rates

During the financial crisis it was proposed that firms be provided with a tax credit for investment projects.Such a tax credit would

An increase in the budget deficit

Which of the following can explain a decrease in the U.S.real exchange rate?

If the government of India implemented a policy that decreased national saving,its real exchange rate would

Which of the following results if the U.S.imposes an import quota on computer components?

An increase in the budget deficit

Which of the following would cause the real exchange rate of the U.S.dollar to depreciate?

Which of the following is most likely to increase exports?