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Principles of Macroeconomics Study Set 8
Exam 19: A Macroeconomic Theory of the Open Economy: Part B
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Question 1
True/False
When a country imposes a trade restriction,the real exchange rate of that country's currency appreciates.
Question 2
True/False
According to the open-economy macroeconomic model,if the U.S.government budget deficit decreases,then both U.S.domestic investment and net capital outflow increase.
Question 3
True/False
In the long run import quotas do not affect the size of net exports.
Question 4
True/False
Other things the same,when a Canadian company imports bicycles from the U.S. ,the open-economy macroeconomic model treats this transaction as part of the demand for dollars in the U.S.foreign-currency exchange market.
Question 5
True/False
An import quota imposed by the U.S.would reduce U.S.imports,but have no impact on U.S.exports.
Question 6
True/False
According to the open-economy macroeconomic model,a decrease in the U.S.government budget deficit increases U.S.net capital outflow,causes the real exchange rate of the dollar to depreciate,and increases U.S.net exports.
Question 7
True/False
In the open-economy macroeconomic model,at the equilibrium real interest rate,the amount that people (including government)want to save equals desired quantities of domestic investment and net capital outflow.