Exam 14: A Macroeconomic Theory of the Open Economy

Which of the following is consistent with moving from a shortage to equilibrium in the market for foreign currency exchange?

At the equilibrium real interest rate in the open-economy macroeconomic model, the amount that people want to save equals the desired quantity of

In the open-economy macroeconomic model, which of the following increases net capital outflow?

A firm produces manufacturing equipment, some of which it exports. Which of the following effects of a budget deficit would likely reduce the quantity of equipment it sells?

Suppose the U.S. supply of loanable funds shifts left. This will

In the open-economy macroeconomic model, the key determinant of net capital outflow is the

In the open-economy macroeconomic model, if the supply of loanable funds shifts right, then

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

If there is a surplus of loanable funds, the quantity demanded is

Other things the same, if the Swedish real interest rate were to decrease, Swedish net capital outflow

If the government of Colombia made policy changes that increased national saving, the real exchange rate of the peso would

Other things the same, if the U.S. interest rate falls, then U.S. residents will want to purchase

Because a government budget deficit represents

If a government increases its budget deficit, then interest rates

Over the past two decades, the United States has persistently exported more goods and services than it has imported.

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

The open-economy macroeconomic model includes

Figure 14-4 -Refer to Figure 14-4. Suppose that the government goes from a budget surplus to a budget deficit. The effects of the change could be illustrated by

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

What effect do protectionist policies have on the trade deficit?