Exam 13: Open-Economy Macroeconomics: Basic Concepts

Goods that cost one dollar in the U.S. cost one euro in France, the real exchange rate would be computed as how many French goods per U.S. goods?

Suppose that money supply growth continues to be higher in Turkey than it is in the United States. What does purchasing-power parity imply will happen to the real and to the nominal exchange rate?

A country recently had a trade deficit of $2.5 trillion and purchased $3 trillion of foreign assets. How many of its assets did foreigners purchase?

A country purchases $3 billion of foreign-produced goods and services and sells $2 billion dollars of domestically produced goods and services to foreign countries. It has

From 1970 to 1998 the U.S. dollar

If purchasing-power parity holds, the price level in the U.S. is 250, and the price level in Japan is 260, which of the following is true?

Other things the same, if a country has a trade deficit and saving rises,

A Chinese company exchanges yuan Chinese currency) for dollars. It uses these dollars to purchase scrap metal from a U.S. company. As a result of these transactions, Chinese

If a nation is selling more goods and services to foreigners than it is buying from them, then on net it must be selling assets abroad.

A nation has a positive net capital outflow. Which of the following is correct?

Assuming purchasing-power parity holds and that over a period of five years the dollar had appreciated relative to the currency of Country X, what would explain the appreciation of the dollar?

A U.S. firm sells diesel locomotives to a German railroad. Other things the same, this sale

A country has net capital outflow of -10 billion euros and domestic investment of 20 billion euros. What is its national saving?

Dave, a U.S. citizen buys a bicycle manufactured in China. Dave's purchase is

If the Canadian nominal exchange rate does not change, but prices rise faster abroad than in Canada, then the Canadian real exchange rate

A country purchases more goods and services from residents of foreign countries than residents of foreign countries purchase from it. This country has

If Israel's domestic investment exceeds its national saving, then Israel has

If a country has Y > C + I + G, then it has

A U.S. retailer buys shoes from an Italian company. The Italian firm then uses all of the revenues to buy leather from the U.S. These transactions

The nominal exchange rate is 30 Thai bhat for one U.S. dollar. A sub sandwich combo deal in the U.S. costs $6 dollars in the U.S. and 120 bhat in Thailand. The real exchange rate is