Exam 14: A Macroeconomic Theory of the Open Economy

If a tariff on lumber were implemented, for the country as a whole which of the following would rise?

When the U.S. real interest rate falls, owning U.S. assets becomes

If policymakers impose import restrictions on clothing, the U.S. trade deficit will shrink.

If a government increases its budget deficit, then domestic interest rates

If the supply of loanable funds shifts left, then

Which of the following would both make a country's real exchange rate rise?

When a country's government budget deficit decreases,

If Kenya experienced capital flight, the supply of Kenyan schillings in the market for foreign-currency exchange would shift

The open-economy macroeconomic model examines the determination of

An increase in real interest rates in the United States changes the quantity of loanable funds demanded because

When a country imposes an import quota, its

Other things the same, people in the U.S. would want to save more if the real interest rate in the U.S.

An increase in the budget deficit causes domestic interest rates

An increase in the budget deficit causes domestic interest rates

The explanation for the slope of

If a country raises its budget deficit, then in the market for foreign-currency exchange

Over the past two decades the U.S. has persistently had trade deficits.

The country of Frequencia is politically very stable and has a long tradition of respecting property rights. If several other countries suddenly became politically unstable, we would expect Frequencia's

As the interest rate rises, it is possible that net capital outflow could move from a positive to a negative value.

If government policy encouraged households to save more at each interest rate, then