Exam 14: A Macroeconomic Theory of the Open Economy

If imports = 500 billion euros, exports = 700 billion euros, purchases of domestic assets by foreign residents = 600 billion euros, and purchases of foreign assets by domestic residents = 800 billion euros, what is the quantity of euros demanded in the market for foreign-currency exchange?

Figure 32-1 -Refer to Figure 32-1. If the real interest rate is 2 percent, there will be a

If the demand for loanable funds shifts left, then

In the open-economy macroeconomic model, the supply of dollars in the market for foreign-currency exchange is upward sloping.

Figure 32-5 Refer to this diagram of the open-economy macroeconomic model to answer the questions below. -Refer to Figure 32-5. Starting from 3% and .75, an increase in the government budget deficit can be illustrated as a move to

In the open-economy macroeconomic model, if for some reason foreign citizens want to purchase more U.S. goods and services at each exchange rate, then

In the open-economy macroeconomic model, if there were a surplus in the market for foreign-currency exchange, the real exchange rate would appreciate.

If at a given real interest rate desired national saving is $200 billion, domestic investment is $100 billion, and net capital outflow is $80 billion, then at that real interest rate in the loanable funds market there is a

In the open economy macroeconomic model, the price that balances supply and demand in the market for foreign- currency exchange model is the

A country has national saving of $90 billion, government expenditures of $30 billion, domestic investment of $50 billion, and net capital outflow of $40 billion. What is its demand for loanable funds?

In the open-economy macroeconomic model, if the supply of loanable funds increases, net capital outflow

In the open-economy macroeconomic model, the source of the supply of loanable funds is

If the quantity of loanable funds supplied is less than the quantity demanded, then there is a

An increase in the budget deficit causes domestic interest rates

An increase in the budget deficit

Other things the same, an increase in the U.S. interest rate causes the quantity of loanable funds supplied to

If Argentina suffers from capital flight, Argentinean domestic investment and Argentinean net exports will both decline.

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

If there is a shortage in the market for foreign-currency exchange, what happens to the exchange rate and to net exports?

The imposition of an import quota shifts