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

In the 1980s,the U.S.government budget deficit rose.At the same time the U.S.trade deficit grew larger,the real exchange rate of the dollar appreciated,and U.S.net capital outflow decreased.Which of these events is contrary to what the open-economy macroeconomic model predicts concerning the effects of an increase in the budget deficit?

According to the open-economy macroeconomic model,import quotas increase which of the following

If U.S.citizens decide to purchase more foreign assets at each interest rate,the U.S.real interest rate

From 2001 to 2004 the U.S.budget went from surplus to deficit.According to the open economy macroeconomic model,this change should have

When Mexico suffered from capital flight in 1994,the U.S.real interest rate

If the risk of holding assets in foreign countries rises relative to the risk of holding U.S assets,then

If the government of Canada increased its budget deficit,then domestic investment

Which of the following is most likely to increase the exports of a country?

If the U.S.imposed an import quota on farm machinery,then sales of U.S.farm machinery equipment producers would

An increase in the budget deficit causes domestic interest rates

Suppose the U.S.removes an import quota on steel.U.S.exports

Trade policies