Exam 19: A Macroeconomic Theory of the Open Economy

If at a given exchange rate foreign citizens want to buy fewer U.S bonds, then the

If a county becomes less likely to default on its bonds, what happens to that country's interest rate and exchange rate? Explain.

In 1998 the Russian government defaulted on its bonds. According to the open-economy macroeconomic model, this should have

In an open economy, national saving equals

If U.S. citizens decide to save a smaller fraction of their incomes, U.S. domestic investment

Figure 32-4 Refer to this diagram of the open-economy macroeconomic model to answer the questions below. -Refer to Figure 32-5. The initial effect of an increase in the budget deficit in the loanable funds market can be illustrated as a move from

If a country raises its budget deficit, then in the market for foreign-currency exchange

If the risk of buying U.S. assets rises because it is discovered that lending institutions had not carefully evaluated borrowers prior to lending them funds, then

What happens to each of the following if the supply of loanable funds shifts left? a. the interest rate b. net capital outflow c. the exchange rate

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

Figure 32-6 Refer to this diagram of the open-economy macroeconomic model to answer the questions below. -Refer to Figure 32-6. If the economy were originally in equilibrium at a and g and the government removed import quotas on autos the economy would move to

The open-economy macroeconomic model examines the determination of

Capital flight refers to

An increase in a country's budget surplus shifts its

If a government increases its budget deficit, then the real exchange rate

If the supply of loanable funds shifts right, then

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

If people decide that some country is now a more risky place to keep their saving, then at the original interest rate in that country there is a

A trade policy is a government policy

Suppose that India has a government budget surplus, and then goes into deficit. This change would