Exam 18: Macroeconomics in an Open Economy

An economy that has interactions in trade or finance with other economies is referred to as

The balance of payments includes all of the following accounts except

Which of the following would decrease net exports in the United States?

If the balance of the current account in the United States is -$900 billion,which of the following is most likely to be true?

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

How might a budget deficit affect the balance of trade?

If the exchange rate between the Mexican peso and the U.S.dollar expressed in terms of pesos per dollar is 13.5 pesos = 1 dollar,what is the exchange rate when expresses in terms of dollars per peso?

Suppose the Fed purchases Treasury securities.Interest rates in the United States will ________ and the U.S.dollar will ________ against foreign currencies.

In an open economy,expansionary monetary policy will cause

Figure 18-1 -Refer to Figure 18-1.The depreciation of the dollar is represented as a movement from

An appreciating yen makes Japanese products

Saving exceeds domestic investment in Japan,which generates a financial account deficit in Japan's balance of payments.

How does an increase in government purchases financed by an increase in the deficit affect exchange rates? Support your answer with graphs of the loanable funds market and the foreign exchange market.

Which of the following is an example of foreign direct investment in China?

If the exchange rate changes from $1.45 = 1 euro to $1.37 = 1 euro,then

Figure 18-1 -Refer to Figure 18-1.The depreciation of the euro is represented as a movement from

Since 1999,the U.S.________ account has recorded relatively minor transactions,such as migrants' transfers,and sales and purchases of nonproduced,nonfinancial assets.

Which of the following is not "crowded out" by higher interest rates as a result of expansionary fiscal policy?

Assuming the United States is the "domestic" country,if the real exchange rate between the United States and Russia decreases from 28 to 23,

Figure 18-1 -Refer to Figure 18-1.Italians cut back on smoking and cut their demand for American cigarettes in half.Assuming all else remains constant,this would be represented as a movement from