Question 1

Egypt has exports of $500 million and imports of $750 million. Egypt

Accepted Answer

A)  sells more overseas then it buys from overseas; it has a trade deficit. 
B)  sells more overseas then it buys from overseas; it has a trade surplus. 
C)  buys more from overseas then it sells overseas; it has a trade deficit. 
D)  buys more from overseas then it sells overseas; it has a trade surplus. 
A)  sells more overseas then it buys from overseas; it has a trade deficit. 
B)  sells more overseas then it buys from overseas; it has a trade surplus. 
C)  buys more from overseas then it sells overseas; it has a trade deficit. 
D)  buys more from overseas then it sells overseas; it has a trade surplus.

Question 2

A country had a net capital outflow of $1.5 trillion and imports of $0.5 trillion. What was the value of its exports?

Accepted Answer

The answer of A country had a net capital outflow...

Question 3

If a country has negative net capital outflows, then its net exports are

Accepted Answer

A)  positive and its saving is larger than its domestic investment. 
B)  positive and its saving is smaller than its domestic investment. 
C)  negative and its saving is larger than its domestic investment. 
D)  negative and its saving is smaller than its domestic investment. 
A)  positive and its saving is larger than its domestic investment. 
B)  positive and its saving is smaller than its domestic investment. 
C)  negative and its saving is larger than its domestic investment. 
D)  negative and its saving is smaller than its domestic investment.

Question 4

A country had a net capital outflow of 300 billion euros and exports of 400 billion euros. What was the value of its imports?

Accepted Answer

The answer of A country had a net capital outflow...

Question 5

A Japanese bank buys U.S. government bonds, this purchase

Accepted Answer

A)  increases U.S. net capital outflow and has no affect on Japanese net capital outflow. 
B)  increases U.S. net capital outflow and increases Japanese net capital outflow. 
C)  increases U.S. net capital outflow, but decreases Japanese net capital outflow. 
D)  decreases U.S. net capital outflow, but increases Japanese net capital outflow. 
A)  increases U.S. net capital outflow and has no affect on Japanese net capital outflow. 
B)  increases U.S. net capital outflow and increases Japanese net capital outflow. 
C)  increases U.S. net capital outflow, but decreases Japanese net capital outflow. 
D)  decreases U.S. net capital outflow, but increases Japanese net capital outflow.

Question 6

If Chileans buy more U.S. stocks and bonds and U.S. residents buy more Chilean wine, then

Accepted Answer

A)  both U.S. net exports and U.S. net capital outflows rise. 
B)  U.S. net exports rise and U.S. net capital outflows fall. 
C)  U.S. net exports fall and U.S. net capital outflows rise. 
D)  both U.S. net exports and U.S. net capital outflows fall. 
A)  both U.S. net exports and U.S. net capital outflows rise. 
B)  U.S. net exports rise and U.S. net capital outflows fall. 
C)  U.S. net exports fall and U.S. net capital outflows rise. 
D)  both U.S. net exports and U.S. net capital outflows fall.

Question 7

When the Mexican peso gets "stronger" relative to the dollar,

Accepted Answer

A)  the U.S. trade deficit with Mexico rises. 
B)  the U.S. trade deficit with Mexico falls. 
C)  the U.S. trade deficit with Mexico is unchanged. 
D)  None of the above necessarily happens. 
A)  the U.S. trade deficit with Mexico rises. 
B)  the U.S. trade deficit with Mexico falls. 
C)  the U.S. trade deficit with Mexico is unchanged. 
D)  None of the above necessarily happens.

Question 8

If a country has $2.4 billion of net exports and purchases $4.8 billion of goods and services from foreign countries, then it has

Accepted Answer

A)  $7.2 billion of exports and $4.8 billion of imports. 
B)  $7.2 billion of imports and $4.8 billion of exports. 
C)  $4.8 billion of exports and $2.4 billion of imports. 
D)  $4.8 billion of imports and $2.4 billion of exports. 
A)  $7.2 billion of exports and $4.8 billion of imports. 
B)  $7.2 billion of imports and $4.8 billion of exports. 
C)  $4.8 billion of exports and $2.4 billion of imports. 
D)  $4.8 billion of imports and $2.4 billion of exports.

Question 9

In the United States, a cup of hot chocolate costs $5. In a foreign country, the same hot chocolate costs 6.5 units of that country's currency. If the exchange rate were 1.3 units of foreign currency per U.S. dollar, what is the real exchange rate?

Accepted Answer

A)  1/2 cup of that country's hot chocolate per cup of U.S. hot chocolate 
B)  1 cup of that country's hot chocolate per cup of U.S. hot chocolate 
C)  2 cups of that country's hot chocolate per cup of U.S. hot chocolate 
D)  None of the above is correct. 
A)  1/2 cup of that country's hot chocolate per cup of U.S. hot chocolate 
B)  1 cup of that country's hot chocolate per cup of U.S. hot chocolate 
C)  2 cups of that country's hot chocolate per cup of U.S. hot chocolate 
D)  None of the above is correct.

Question 10

Nominal exchange rates

Accepted Answer

A)  vary little over time. 
B)  vary substantially over time. 
C)  appreciate over time for most countries. 
D)  depreciate over time for most countries. 
A)  vary little over time. 
B)  vary substantially over time. 
C)  appreciate over time for most countries. 
D)  depreciate over time for most countries.

Question 11

Suppose the real exchange rate is 5/4 of a Canadian textbook per U.S. textbook , a U.S. textbook costs $150, and a Canadian one costs 120 Canadian dollars. To the nearest penny, what is the nominal exchange rate?

Accepted Answer

A)  .64 Canadian dollars per U.S. dollar 
B)  1 Canadian dollar per U.S. dollar 
C)  1.56 Canadian dollars per U.S. dollar 
D)  None of the above is correct. 
A)  .64 Canadian dollars per U.S. dollar 
B)  1 Canadian dollar per U.S. dollar 
C)  1.56 Canadian dollars per U.S. dollar 
D)  None of the above is correct.

Question 12

A U.S. mutual fund uses $1 million to buy yen from a Japanese bank. It then uses these yen to buy stocks in a Japanese electronics firm. The Japanese electronic firm then exchanges the $1 million dollars of yen for dollars from a U.S. bank. It uses these dollars to buy equipment manufactured by a company located in the U.S. As a result of these exchanges, by how much, if at all, and in which direction does:
A. U.S. net exports change?
B. U.S. net capital outflow change?

Accepted Answer

A. U.S. net exports

Question 13

In the United States, a three-pound can of coffee costs about $5. If the exchange rate is 0.8 euros per dollar and a three-pound can of coffee in Belgium costs 7 euros. What is the real exchange rate?

Accepted Answer

A)  7/4 cans of Belgian coffee per can of U.S. coffee 
B)  5.6/5 cans of Belgian coffee per can of U.S. coffee 
C)  5/5.6 cans of Belgian coffee per can of U.S. coffee 
D)  4/7 cans of Belgian coffee per can of U.S. coffee 
A)  7/4 cans of Belgian coffee per can of U.S. coffee 
B)  5.6/5 cans of Belgian coffee per can of U.S. coffee 
C)  5/5.6 cans of Belgian coffee per can of U.S. coffee 
D)  4/7 cans of Belgian coffee per can of U.S. coffee

Question 14

If a country's net exports fall, then its net capital outflow falls by the same amount.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following equations is correct?

Accepted Answer

A)  Y = C + I + G + NCO 
B)  NX = NCO 
C)  NCO = S - I 
D)  All of the above are correct. 
A)  Y = C + I + G + NCO 
B)  NX = NCO 
C)  NCO = S - I 
D)  All of the above are correct.

Question 16

According to purchasing power parity, the nominal exchange rate between the U.S. and another country should equal the price level of foreign goods divided by the price level of U.S. goods.

Accepted Answer

A) True 
 B)False

Question 17

Other things the same, an increase in the foreign price level leads to an increase in the real exchange rate.

Accepted Answer

A) True 
 B)False

Question 18

According to purchasing-power parity, if over the course of a year the price level in the U.S. rises more than in Japan, then which of the following falls?

Accepted Answer

A)  the U.S. real exchange rate, but not the U.S. nominal exchange rate 
B)  the U.S. nominal exchange rate, but not the U.S. real exchange rate 
C)  the U.S. nominal exchange rate and the U.S. real exchange rate 
D)  neither the real exchange rate nor the nominal exchange rate 
A)  the U.S. real exchange rate, but not the U.S. nominal exchange rate 
B)  the U.S. nominal exchange rate, but not the U.S. real exchange rate 
C)  the U.S. nominal exchange rate and the U.S. real exchange rate 
D)  neither the real exchange rate nor the nominal exchange rate

Question 19

According to purchasing-power parity which of the following would happen if a country raised its money supply growth rate?

Accepted Answer

A)  its nominal exchange rate would fall 
B)  its real exchange rate would fall 
C)  its real net exports would rise 
D)  All of the above would happen. 
A)  its nominal exchange rate would fall 
B)  its real exchange rate would fall 
C)  its real net exports would rise 
D)  All of the above would happen.

Question 20

An open economy's GDP is always given by

Accepted Answer

A)  Y = C + I + G. 
B)  Y = C + I + G + T. 
C)  Y = C + I + G + S. 
D)  Y = C + I + G + NX. 
A)  Y = C + I + G. 
B)  Y = C + I + G + T. 
C)  Y = C + I + G + S. 
D)  Y = C + I + G + NX.

Egypt has exports of $500 million and imports of $750 million. Egypt

A country had a net capital outflow of $1.5 trillion and imports of $0.5 trillion. What was the value of its exports?

If a country has negative net capital outflows, then its net exports are

A country had a net capital outflow of 300 billion euros and exports of 400 billion euros. What was the value of its imports?

A Japanese bank buys U.S. government bonds, this purchase

If Chileans buy more U.S. stocks and bonds and U.S. residents buy more Chilean wine, then

When the Mexican peso gets "stronger" relative to the dollar,

If a country has $2.4 billion of net exports and purchases $4.8 billion of goods and services from foreign countries, then it has

In the United States, a cup of hot chocolate costs $5. In a foreign country, the same hot chocolate costs 6.5 units of that country's currency. If the exchange rate were 1.3 units of foreign currency per U.S. dollar, what is the real exchange rate?

Nominal exchange rates

Suppose the real exchange rate is 5/4 of a Canadian textbook per U.S. textbook , a U.S. textbook costs $150, and a Canadian one costs 120 Canadian dollars. To the nearest penny, what is the nominal exchange rate?

In the United States, a three-pound can of coffee costs about $5. If the exchange rate is 0.8 euros per dollar and a three-pound can of coffee in Belgium costs 7 euros. What is the real exchange rate?

If a country's net exports fall, then its net capital outflow falls by the same amount.

Which of the following equations is correct?

According to purchasing power parity, the nominal exchange rate between the U.S. and another country should equal the price level of foreign goods divided by the price level of U.S. goods.

Other things the same, an increase in the foreign price level leads to an increase in the real exchange rate.

According to purchasing-power parity, if over the course of a year the price level in the U.S. rises more than in Japan, then which of the following falls?

According to purchasing-power parity which of the following would happen if a country raised its money supply growth rate?

An open economy's GDP is always given by

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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Exam 13: Open-Economy Macroeconomics: Basic Concepts

Egypt has exports of $500 million and imports of $750 million. Egypt

A country had a net capital outflow of $1.5 trillion and imports of $0.5 trillion. What was the value of its exports?

If a country has negative net capital outflows, then its net exports are

A country had a net capital outflow of 300 billion euros and exports of 400 billion euros. What was the value of its imports?

A Japanese bank buys U.S. government bonds, this purchase

If Chileans buy more U.S. stocks and bonds and U.S. residents buy more Chilean wine, then

When the Mexican peso gets "stronger" relative to the dollar,

If a country has $2.4 billion of net exports and purchases $4.8 billion of goods and services from foreign countries, then it has

In the United States, a cup of hot chocolate costs $5. In a foreign country, the same hot chocolate costs 6.5 units of that country's currency. If the exchange rate were 1.3 units of foreign currency per U.S. dollar, what is the real exchange rate?

Nominal exchange rates

Suppose the real exchange rate is 5/4 of a Canadian textbook per U.S. textbook , a U.S. textbook costs $150, and a Canadian one costs 120 Canadian dollars. To the nearest penny, what is the nominal exchange rate?

In the United States, a three-pound can of coffee costs about $5. If the exchange rate is 0.8 euros per dollar and a three-pound can of coffee in Belgium costs 7 euros. What is the real exchange rate?

If a country's net exports fall, then its net capital outflow falls by the same amount.

Which of the following equations is correct?

According to purchasing power parity, the nominal exchange rate between the U.S. and another country should equal the price level of foreign goods divided by the price level of U.S. goods.

Other things the same, an increase in the foreign price level leads to an increase in the real exchange rate.

According to purchasing-power parity, if over the course of a year the price level in the U.S. rises more than in Japan, then which of the following falls?

According to purchasing-power parity which of the following would happen if a country raised its money supply growth rate?

An open economy's GDP is always given by

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters