Question 1

Table 31-1
 
-Refer to Table 31-1. What are Bolivia's imports?

Accepted Answer

A)   $60 billion
B)   $35 billion
C)   $40 billion
D)   None of the above are correct.E) None of the above
F) All of the above

Question 2

If a U.S. shirt maker purchases cotton from Egypt, U.S. net exports

Accepted Answer

A)   increase, and U.S. net capital outflow increases.
B)   increase, and U.S. net capital outflow decreases.
C)   decrease, and U.S. net capital outflow increases.
D)   decrease, and U.S. net capital outflow decreases.E) B) and C)
F) A) and D)

Question 3

A country sells more to foreign countries than it buys from them. It has

Accepted Answer

A)   a trade surplus and positive net exports.
B)   a trade surplus and negative net exports.
C)   a trade deficit and positive net exports.
D)   a trade deficit and negative net exports.E) A) and B)
F) All of the above

Question 4

If a country has a trade surplus

Accepted Answer

A)   it has positive net exports and positive net capital outflow.
B)   it has positive net exports and negative net capital outflow.
C)   it has negative net exports and positive net capital outflow.
D)   it has negative net exports and negative net capital outflow.E) All of the above
F) None of the above

Question 5

Other things the same, if the exchange rate changes from 75 Algerian dinar per dollar to 72 Algerian dinar per dollar, the dollar has

Accepted Answer

A)   appreciated and so buys more Algerian goods.
B)   appreciated and so buys fewer Algerian goods.
C)   depreciated and so buys more Algerian goods.
D)   depreciated and so buys fewer Algerian goods.E) B) and D)
F) B) and C)

Question 6

If Saudi Arabia had negative net exports last year, then it

Accepted Answer

A)   sold more abroad than it purchased abroad and had a trade surplus.
B)   sold more abroad than it purchased abroad and had a trade deficit.
C)   bought more abroad than it sold abroad and had a trade surplus.
D)   bought more abroad than it sold abroad and had a trade deficit.E) C) and D)
F) A) and B)

Question 7

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

Accepted Answer

A)   Purchases of foreign assets by domestic residents exceed purchases of domestic assets by foreigners
B)   It has positive net exports.
C)   Its savings exceeds its domestic investment.
D)   All of the above are correct.E) C) and D)
F) A) and B)

Question 8

In the United States, a cup of hot chocolate costs $5. In a foreign country, the same hot chocolate costs 6.5 units of that country's currency. If the exchange rate were 1.3 units of foreign currency per U.S. dollar, what is the real exchange rate?

Accepted Answer

A)   1/2 cup of that country's hot chocolate per cup of U.S. hot chocolate
B)   1 cup of that country's hot chocolate per cup of U.S. hot chocolate
C)   2 cups of that country's hot chocolate per cup of U.S. hot chocolate
D)   None of the above is correct.E) C) and D)
F) A) and C)

Question 9

If a McDonald's Big Mac cost $4.50 in the United States and 3.60 euros in the Euro area, then purchasing-power parity implies the nominal exchange rate is how many euros per dollar?

Accepted Answer

A)   1.25 If the value is less than this, it costs more dollars to buy a Big Mac in the U.S. than in the Euro area.
B)   1.25 If the value is less than this, it costs fewer dollars to buy a Big Mac in the U.S. then in the Euro area.
C)   .80 If the value is less than this, it costs more dollars to buy a Big Mac in the U.S. than in the Euro area.
D)   .80 If the value is less than this, it costs fewer dollars to buy a Big Mac in the U.S. than in the Euro area.E) A) and B)
F) None of the above

Question 10

A Finnish corporation builds a factory the produces ceiling fans in the United States. This is an example of Finish

Accepted Answer

A)   foreign direct investment that increases Finnish net capital outflow.
B)   foreign direct investment that decreases Finnish net capital outflow.
C)   foreign portfolio investment that increases Finnish net capital outflow.
D)   foreign portfolio investment that decreases Finnish net capital outflow.E) C) and D)
F) B) and C)

Question 11

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

Accepted Answer

A)   fewer domestic goods and fewer foreign goods.
B)   more domestic goods and fewer foreign goods.
C)   fewer domestic goods and more foreign goods.
D)   more domestic goods and more foreign goods.E) A) and B)
F) B) and C)

Question 12

A country's trade balance will fall if

Accepted Answer

A)   either investment or saving rise.
B)   either investment falls or saving rises.
C)   either saving falls or investment rises.
D)   either investment or saving fall.E) A) and D)
F) B) and D)

Question 13

Goods that cost one dollar in the U.S. cost one euro in France, the real exchange rate would be computed as how many French goods per U.S. goods?

Accepted Answer

A)   one
B)   the price of the U.S. goods
C)   the number of euros that can be bought with one U.S. dollar
D)   None of the above is correct.E) A) and D)
F) A) and C)

Question 14

The value of the goods and services Australia purchases from the U.S. are less than the value of goods and services the U.S. purchases from Australia. The U.S. has

Accepted Answer

A)   positive net exports with Australia and a trade surplus with Australia.
B)   positive net exports with Australia and a trade deficit with Australia.
C)   negative net exports with Australia and a trade surplus with Australia.
D)   negative net exports with Australia and a trade deficit with Australia.E) B) and D)
F) A) and C)

Question 15

Other things the same, an increase in the real exchange rate raises U.S. net exports.

Accepted Answer

A) True 
 B)False

Question 16

A U.S. mutual fund uses $1 million to buy yen from a Japanese bank. It then uses these yen to buy stocks in a Japanese electronics firm. The Japanese electronic firm then exchanges the $1 million dollars of yen for dollars from a U.S. bank. It uses these dollars to buy equipment manufactured by a company located in the U.S. As a result of these exchanges, by how much, if at all, and in which direction does:
A. U.S. net exports change?
B. U.S. net capital outflow change?

Accepted Answer

A. U.S. net exports ...

Question 17

Which of the following is correct?

Accepted Answer

A)   NCO + C = NX
B)   NCO = NX
C)   NX - NCO = S
D)   NX + NCO = CE) A) and B)
F) B) and C)

Question 18

Which of the following equations is correct?

Accepted Answer

A)   S = I + C
B)   S = I - NX
C)   S = I + NCO
D)   S = NX - NCO.E) A) and C)
F) B) and D)

Question 19

Which of the following is always correct?

Accepted Answer

A)   Y - I = NCO
B)   NCO = NX
C)   NX = I
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 20

Most of the change from 1991 to 2000 in U.S. net capital outflow as a percent of GDP was due to an)

Accepted Answer

A)   decrease in U.S. investment.
B)   decrease in U.S. national saving.
C)   increase in U.S. investment.
D)   increase in U.S. national saving.E) B) and C)
F) A) and D)

Exam 18: Open-Economy Macroeconomics: Basic Concepts

Which of the following is correct?

Correct Answer
verified

The value of the goods and services Australia purchases from the U.S. are less than the value of goods and services the U.S. purchases from Australia. The U.S. has

Correct Answer
verified

A country sells more to foreign countries than it buys from them. It has

Correct Answer
verified

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

Correct Answer
verified

Goods that cost one dollar in the U.S. cost one euro in France, the real exchange rate would be computed as how many French goods per U.S. goods?

Correct Answer
verified

If a country has a trade surplus

Correct Answer
verified

A Finnish corporation builds a factory the produces ceiling fans in the United States. This is an example of Finish

Correct Answer
verified

If Saudi Arabia had negative net exports last year, then it

Correct Answer
verified

Correct Answer
verified
A. U.S. net exports ...
View Answer

A country's trade balance will fall if

Correct Answer
verified

Table 31-1 -Refer to Table 31-1. What are Bolivia's imports?

Correct Answer
verified

Which of the following is always correct?

Correct Answer
verified

In the United States, a cup of hot chocolate costs $5. In a foreign country, the same hot chocolate costs 6.5 units of that country's currency. If the exchange rate were 1.3 units of foreign currency per U.S. dollar, what is the real exchange rate?

Correct Answer
verified

Other things the same, if the exchange rate changes from 75 Algerian dinar per dollar to 72 Algerian dinar per dollar, the dollar has

Correct Answer
verified

Other things the same, an increase in the real exchange rate raises U.S. net exports.

Correct Answer
verified

Which of the following equations is correct?

Correct Answer
verified

If a U.S. shirt maker purchases cotton from Egypt, U.S. net exports

Correct Answer
verified

If a McDonald's Big Mac cost $4.50 in the United States and 3.60 euros in the Euro area, then purchasing-power parity implies the nominal exchange rate is how many euros per dollar?

Correct Answer
verified

Most of the change from 1991 to 2000 in U.S. net capital outflow as a percent of GDP was due to an)

Correct Answer
verified

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

Correct Answer
verified

Exam 18: Open-Economy Macroeconomics: Basic Concepts

Which of the following is correct?

Correct AnswerverifiedShow Answer

The value of the goods and services Australia purchases from the U.S. are less than the value of goods and services the U.S. purchases from Australia. The U.S. has

Correct AnswerverifiedShow Answer

A country sells more to foreign countries than it buys from them. It has

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Goods that cost one dollar in the U.S. cost one euro in France, the real exchange rate would be computed as how many French goods per U.S. goods?

Correct AnswerverifiedShow Answer

If a country has a trade surplus

Correct AnswerverifiedShow Answer

A Finnish corporation builds a factory the produces ceiling fans in the United States. This is an example of Finish

Correct AnswerverifiedShow Answer

If Saudi Arabia had negative net exports last year, then it

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA. U.S. net exports ...View AnswerShow Answer

A country's trade balance will fall if

Correct AnswerverifiedShow Answer

Table 31-1 -Refer to Table 31-1. What are Bolivia's imports?

Correct AnswerverifiedShow Answer

Which of the following is always correct?

Correct AnswerverifiedShow Answer

In the United States, a cup of hot chocolate costs $5. In a foreign country, the same hot chocolate costs 6.5 units of that country's currency. If the exchange rate were 1.3 units of foreign currency per U.S. dollar, what is the real exchange rate?

Correct AnswerverifiedShow Answer

Other things the same, if the exchange rate changes from 75 Algerian dinar per dollar to 72 Algerian dinar per dollar, the dollar has

Correct AnswerverifiedShow Answer

Other things the same, an increase in the real exchange rate raises U.S. net exports.

Correct AnswerverifiedShow Answer

Which of the following equations is correct?

Correct AnswerverifiedShow Answer

If a U.S. shirt maker purchases cotton from Egypt, U.S. net exports

Correct AnswerverifiedShow Answer

If a McDonald's Big Mac cost $4.50 in the United States and 3.60 euros in the Euro area, then purchasing-power parity implies the nominal exchange rate is how many euros per dollar?

Correct AnswerverifiedShow Answer

Most of the change from 1991 to 2000 in U.S. net capital outflow as a percent of GDP was due to an)

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A. U.S. net exports ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified