Exam 18: Macroeconomics in an Open Economy

When a foreign investor buys a bond issued in the United States,

Following a tax cut by government,domestic investment will ________ and net exports will ________.

If the balance on the current account is $842 billion and the balance on the financial account is -$603 billion,what is the balance on the capital account,assuming no statistical discrepancy?

When the market value of the dollar rises relative to other currencies around the world,we say that

The balance of trade includes trade in

In an open economy,the current account balance equals ________.(Assume that the capital account is zero and net transfers are zero. )

If net exports are equal to net foreign investment,which of the following is not true?

If the exchange rate changes from $0.08 = 1 mexican peso to $0.09 = 1 mexican peso,then

Explain the relationship between net exports and net foreign investment.

If Californians increase their purchases of Italian wine,assuming all else remains constant,this will ________ of the United States.

When a U.S.investor buys a bond issued in a foreign country,

If the United States has a net export surplus,which of the following must be true?

If the Fed pursues an expansionary monetary policy,investment in the United States will ________ and net exports will ________.

Although based in the United States,IBM is a global company with more than ________ of its revenue earned outside of the United States.

A decrease in the demand for American-made goods will

If New Yorkers decrease their purchases of French champagne,assuming all else remains constant,this will ________ of the United States.

How will an increase in federal government spending without an increase in taxes affect real GDP and the price level in the short run in a closed economy and in an open economy?

The current account deficits incurred by the United States in the 1990s and early 2000s were caused,in the opinion of many economists,by

Currency traders expect the value of the dollar to fall.What effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?

How is the impact of expansionary monetary policy different in an open economy than in a closed economy?