Exam 14: A Macroeconomic Theory of the Open Economy

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

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

Capital flight shifts the NCO curve to the left.

When the government budget deficit increases, national saving increases.

If Argentina suffers from capital flight, Argentinean domestic investment and Argentinean net exports will both decline.

In an open economy,

Other things the same, as the real interest rate rises

A drop in a country's real interest rate reduces that country's net capital outflow.

If the risk of buying U.S. assets rises because it is discovered that lending institutions had not carefully evaluated borrowers prior to lending them funds, then

Capital flight reduces a country's real exchange rate.

If the exchange rate falls, U.S. residents pay

In the United States in the early 1980s, there was a government budget

The variable that links the market for loanable funds and the market for foreign-currency exchange is

Recently Greece ran large deficits and people became worried about the ability of its government to make payments on its debt. Which of the these events reduces a country's real exchange rate?

Which of the following is the most accurate statement?

Which of the following is correct?

According to the open-economy macroeconomic model, if the United States moved from a government budget deficit to a government budget surplus, U.S. real interest rates would increase and the real exchange rate of the U.S. dollar would appreciate.

If the U.S. imposed an import quota on apples, then which of the following would rise?

An increase in the budget deficit makes domestic interest rates

If people decide that some country is now a more risky place to keep their saving, then at the original interest rate in that country there is a