Exam 14: A Macroeconomic Theory of the Open Economy

If there is capital flight from the United States, then the demand for loanable funds

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

If the exchange rate rises, which of the following falls in the open-economy macroeconomic model?

If foreigners want to buy more U.S. bonds, then in the market for foreign-currency exchange the exchange rate

Suppose that U.S. investors decide that investment opportunities in African countries have improved. What happens to U.S. net capital outflow? What happens to the U.S. real interest rate?

Suppose that Chile has a government budget surplus, and then goes into deficit. This change would

Which of the following is considered part of the supply of U.S. dollars in the market for foreign-currency exchange in the open-economy macroeconomic model?

If U.S. citizens decide to save a smaller fraction of their incomes, U.S. domestic investment

If a country has a negative net capital outflow, then

Other things the same, a decrease in the U.S. real interest rate induces

Which of the following would not be a consequence of an increase in the U.S. government budget deficit?

Which of the following would tend to shift the supply of dollars in the market for foreign-currency exchange in the open-economy macroeconomic model to the right?

If the U.S. government imposes a quota on toy imports, then net exports of U.S. toys would

In the open-economy macroeconomic model, the supply of loanable funds comes from

If a country went from a government budget deficit to a surplus, national saving would

If the real exchange rate for the dollar is below the equilibrium level, the quantity of dollars supplied in the market for foreign-currency exchange is

In the open-economy macroeconomic model, if for some reason foreign citizens want to purchase more U.S. goods and services at each exchange rate, then

Capital flight increases a country's interest rate. This increase in the interest rate makes net capital outflow lower than it would be had the interest rate stayed the same.

A country has output of $700 billion, consumption of $500 billion, government expenditures of $100 and investment of $60 million. What is its supply of loanable funds?

Suppose that the United States imposes an import quota on televisions. In the open-economy macroeconomic model this quota shifts the