Exam 18: Open-Economy Macroeconomics: Basic Concepts

Last year residents of Country A purchased $600 billion of foreign assets. Foreigners purchased $425 billion dollars of assets and $375 billion of goods and services from country A. What was the value of Country A's imports?

When Microsoft establishes a distribution center in France, U.S. net capital outflow

As measured by the amount of trade it does, has the U.S. economy become more internationalized? Provide two reasons for this change.

You are the CEO of a U.S. firm considering building a factory in Chile. If the dollar appreciates relative to the Chilean peso, then other things the same

Last year country A's residents purchased $700 billion of goods and services from and sold $500 billion of goods and services to residents of foreign countries. Its domestic investment was $1,100. What was country A's saving? Show your work.

Net capital outflow measures the imbalance between the amount of

From 1970 to 1998 the U.S. dollar

The dollar is said to appreciate against the euro if

Which of the following statements is correct for an open economy with a trade surplus?

Suppose that a country imports $90 million worth of goods and services and exports $80 million worth of goods and services. What is the value of net exports?

Sam, a U.S. citizen, buys bonds issued by a Greek company that bottles olives. Sam's purchase is

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

According to purchasing-power parity, if prices in the United States increase by a larger percentage than prices in the United Kingdom, then the

A tall latte in China costs 30 yuan. The same latte in the U.S. costs 4 dollars. If the exchange rate is 6.5 yuan per dollar then, the real exchange rate is

Other things the same, according to purchasing-power parity, if over the next few years Mexico has a higher money supply growth rate than the U.S., then

A country must have a positive net outflow of capital if it has a trade deficit.

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?

During 2011 the inflation rate in Brazil was about 6.6% while in the U.S. it was about 3.3%. At the start of 2011 the nominal exchange rate was about 1.7 Brazilian real per U.S. dollar. If purchasing-power parity holds, about what should the nominal exchange rate have been at the end of 2011? Show your work.

If saving is less than domestic investment, then

If purchasing-power parity holds, a dollar will buy