Exam 31: Open-Economy Macroeconomics: Basic Concepts

If the real exchange rate is 5/4 pounds of Chilean beef per pound of U.S. beef, a pound of U.S. beef costs $2 and the nominal exchange rate is 500 Chilean pesos per dollar, then Chilean beef costs

Last year a country had exports of $100 billion, imports of $70 billion, and purchased $60 billion worth of foreign assets. What was the value of domestic assets purchased by foreigners?

If Israel's domestic investment exceeds its national saving, then Israel has

If the U.S. real exchange rate is greater than 1, then there is the possibility of arbitraging by buying foreign goods to sell in the U.S.

You are planning a graduation trip to Mexico. Other things the same, if the dollar depreciates relative to the peso, then

Other things the same, an increase in domestic prices raises the real exchange rate.

Dave, a U.S. citizen buys a bicycle manufactured in China. Dave's purchase is

If the exchange rate is 5 Egyptian pounds per U.S. dollar, a watch that costs $25 US dollars costs

If U.S. exports are $300 billion and U.S. imports total $350 billion, which of the following is correct?

If purchasing-power parity holds, a dollar will buy

Consider an identical basket of goods in both the U.S. and Taiwan. For a given nominal exchange rate, in which case is it certain that the U.S. real exchange rate with Taiwan falls?

A nation has a positive net capital outflow. Which of the following is correct?

The law of one price states that

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?

Movies are a major export of the U.S.

An appreciation of the U.S. real exchange rate induces U.S. consumers to buy

If a country's imports exceed its exports it has a trade surplus.

From 1980-1987, U.S. net capital outflow as a percent of GDP became a

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

Derive the relation between savings, domestic investment, and net capital outflow using the national income accounting identity.