Exam 18: Open-Economy Macroeconomics: Basic Concepts

By itself, if a U.S. firm builds a new factory overseas, U.S. net capital outflow rises.

Both foreign direct investment and foreign portfolio investment by U.S. residents increase U.S. net capital outflow.

From 2008 to 2012 both U.S. saving and U.S. investment fell.

According to purchasing-power parity, if two countries have the same price level because they have the same prices for all goods and services, then which of the following would equal 1?

Over the past five decades, the U.S. economy has become

In an open economy, gross domestic product equals $1,650 billion, government expenditure equals $250 billion, and savings equals $550 billion. What is consumption expenditure?

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

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

Net exports of a country are the value of

Paul, a Canadian citizen, purchases oranges grown in Florida. This purchase is an example of

Last year residents of country A purchased $400 billion of foreign assets and $200 of foreign goods. Foreigners purchased $300 billion dollars of country A's assets. What was the value of country A's exports?

If a county has 25 billion euros of imports, 15 billion euros of exports, and sells 20 billion euros of assets to foreigners, how many foreign assets do domestic residents purchase?

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

If a U.S. firm buys Chinese toys using previously obtained Chinese currency, then both U.S. net exports and U.S. net capital outflow decrease.

The large trade deficits in the U.S. during the 1990's were primarily associated with a rise in domestic investment spending rather than a rise in the budget deficit.

If the nominal exchange rate e is foreign currency per dollar, the domestic price is P, and the foreign price is P*, then the real exchange rate is defined as

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?

A U.S. grocery chain buys bananas from Honduras and pays for them with U.S. dollars.

Other things the same, the real exchange rate between U.S. and Belgian goods would be higher if