Exam 13: Open-Economy Macroeconomics: Basic Concepts

During some year a country had exports of $50 billion, imports of $70 billion, and domestic investment of $100 billion. What was its saving during the year?

If the exchange rate rises from .65 British pounds per dollar to .70 pounds per dollar, then compared to British goods, U.S. goods become

A pair of jeans cost $25 in the U.S. and 1600 dinar in Algeria. If the nominal exchange rate is 75 dinar per U.S. dollar, then the real exchange rate is

If it took as many dollars to buy goods in the United States as it did to buy enough currency to buy the same goods in India, the real exchange rate would be computed as how many Indian goods per U.S. goods?

Suppose that foreign citizens decide to purchase more U.S. pharmaceuticals and U.S. citizens decide to buy more stock in foreign corporations. Other things the same, these actions

Table 31-2 -Refer to Table 31-2. For which countries in the table does purchasing-power parity with the U.S. hold?

Other things the same, an increase in the nominal exchange rate raises the real exchange rate.

Which of the following is an example of U.S. foreign direct investment?

Other things the same, if a country's domestic investment decreases, then

According to purchasing-power parity, if the price of a basket of goods in the U.S. rose from $1,500 to $2,000 and the price of the same basket of goods rose from 600 units of some other country's currency to 1,000 units of that country's currency, then the

If the real exchange rate is greater than 1, then the

When Jamie, a U.S. citizen, purchases a wool jacket made in Ireland, the purchase is

Suppose a Starbucks tall latte cost $4.00 in the United States and 2.50 euros in the Euro area. Also, suppose a McDonald's Big Mac costs $4.50 in the United States and 3.60 euros in the Euro area. If the nominal exchange rate is .80 euros per dollar, which goods have prices that are consistent with purchasing-power parity?

From 1970 to 1998 the U.S. dollar

Which of the following is an example of U.S. foreign direct investment?

A Texas ranch sells beef to a U.S. company that sells it to a grocery chain in Japan. These sales

When U.S. national saving rises, domestic investment also necessarily rises.

Movies are a major export of the U.S.

In the 1970s and 1980s the U.S. dollar depreciated against the German mark and appreciated against the Italian lira because U.S. inflation was lower than in Germany but higher than in Italy.

If the U.S. real exchange rate is greater than 1, then there is the possibility of arbitraging by buying foreign goods to sell in the U.S.