Exam 19: A Macroeconomic Theory of the Open Economy

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

Figure 32-1 -Refer to Figure 32-1. The loanable funds market is in equilibrium at

A country recently had 500 billion euros of national saving and -200 billion euros of net capital outflow. What was its domestic investment? What was its quantity of loanable funds supplied?

If the real exchange rate for the dollar is above the equilibrium level, the quantity of dollars supplied in the market for foreign-currency exchange is

Other things the same, if the Japanese real interest rate were to increase, Japanese net capital outflow

The primary focus of the open-economy macroeconomic model is the determination of GDP and the price level.

If the supply of loanable funds shifts left, then

If U.S. citizens decide to purchase more foreign assets at each interest rate, the U.S. real interest rate

When a country imposes a trade restriction, the real exchange rate of that country's currency appreciates.

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

When a country suffers from capital flight, the exchange rate

Fill in the table below with the direction of the variables that change in response to the events in the first column.

When a government increases its budget deficit, then that country's

In the open-economy macroeconomic model, the supply of loanable funds comes from

If a country's exchange rate rises, what happens to its exports and what happens to its imports?

An increase in the budget deficit makes domestic interest rates

If a country repeals an investment tax credit,

If the Canadian government raises it budget deficit, then Canada's net capital outflows will

When the U.S. real interest rate falls, purchasing U.S. assets becomes

When a country imposes an import quota, its exchange rate