Exam 31: Open-Economy Macroeconomics: Basic Concepts

Suppose that more British decide to vacation in the U.S. and that the British purchase more U.S. Treasury bonds. Ignoring how payments are made for these purchases,

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

According to purchasing-power parity, inflation in the U.S. causes the dollar to

Other things the same, if the U.S. real exchange rate appreciates, U.S. net exports

Suppose that U.S. citizens purchase more cars made in Korea, and Koreans purchase more bonds issued by U.S. corporations. Other things the same, these actions

If purchasing-power parity holds, then the value of the

Purchasing-power parity theory does not hold at all times because

When making investment decisions, investors

An increase in U.S. sales of movies to other countries raises U.S.

If the real exchange rate is less than 1, then the

When a Japanese auto maker opens a factory in the U.S., U.S. net capital outflow

If the price of a sofa is $800 in the U.S. and 2400 pesos in Argentina, and the exchange rate is 4 pesos per dollar, what is the real exchange rate?

Other things the same, if the exchange rate changes from 6 Chinese yuan per dollar to 7 Chinese yuan per dollar, then the dollar

Suppose the real exchange rate is 3/4 gallon of country A's gasoline per gallon of U.S. gasoline, a gallon of U.S. gasoline costs $3.00 U.S., and a gallon of gas in country A costs 6 units of their currency. What is the nominal exchange rate?

Firms in Saudi Arabia sell oil to the U.S. Other things the same, these oil sales

A country recently had a GDP of $1000 billion. Its consumption expenditures were $650 billion, its government spent $250 billion, and it had domestic investment of $150 billion. What was the value of this country's net capital outflow? Explain how you found your answer.

According to purchasing-power parity, when a country's central bank decreases the money supply, a unit of money

If a country had a trade surplus of $100 billion and then its exports rose by $40 billion and its imports rose by $30 billion, its net exports would now be

An American brewery sells dollars to obtain euros. It then uses the euros to buy brewing equipment from a German company. These transactions

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?