Exam 14: A Macroeconomic Theory of the Open Economy

Which of the following is most likely to result if foreigners decide to withdraw the funds that they have loaned to the United States?

An increase in the budget surplus

When Mexico suffered from capital flight in 1994, Mexico's net capital outflow

Which of the following results if the U.S. imposes an import quota on computer components?

If the supply of dollars in the market for foreign-currency exchange shifts left, then the exchange rate

From 2001 to 2004 the U.S. budget went from surplus to deficit. According to the open economy macroeconomic model, this change should have

Trade policies

Capital flight raises a country's interest rate.

If the supply of loanable funds shifts right, then the equilibrium

If a government of a country with a zero trade balance increases its budget deficit, then the real exchange rate

A trade policy is a government policy

If the government of India implemented a policy that decreased national saving, its real exchange rate would

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

Which of the following would cause the real exchange rate of the U.S. dollar to appreciate?

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

Other things the same, which curve in the market for foreign-currency exchange shifts and which direction does it shift if net capital outflow rises?

When a country experiences capital flight its

Which of the following is the most likely result from an increase in a country's government budget surplus?

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

If a country went from a government budget deficit to a surplus, national saving would