Question 1

If the exchange rate changes from 148 Kazakhstan tenge per dollar to 155 Kazakhstan tenge per dollar,the dollar has

Accepted Answer

A)   appreciated.Other things the same,it now takes fewer dollars to buy Kazakhstani goods.
B)   appreciated.Other things the same,it now takes more dollars to buy Kazakhstani goods.
C)   depreciated.Other things the same,it now takes fewer dollars to buy Kazakhstani goods.
D)   depreciated.Other things the same,it now takes more dollars to buy Kazakhstani goods.E) A) and B)
F) All of the above

Question 2

If a dollar buys more rice in the China.than in the U.S. ,then

Accepted Answer

A)   the real exchange rate is greater than 1;a profit might be made by buying rice in the U.S.and selling it in China.
B)   the real exchange rate is greater than 1;a profit might be made by buying rice in China.and selling it in the U.S.
C)   the real exchange rate is less than 1;a profit might be made by buying rice in the U.S.and selling it in China.
D)   the real exchange rate is less than 1;a profit might be made by buying rice in China and selling it in the U.S.E) A) and B)
F) All of the above

Question 3

Carl and Carly are American residents.Carl buys stock of a corporation in Austria.Carly opens a coffee shop in Austria.Whose purchase,by itself,decreases Austria's net capital outflow?

Accepted Answer

A)   Carl's
B)   Carly's
C)   both Carl's and Carly's
D)   neither Carl's nor Carly'sE) A) and D)
F) None of the above

Question 4

During 2011 the inflation rate in Brazil was about 6.6% while in the U.S.it was about 3.3%.At the start of 2011 the nominal exchange rate was about 1.7 Brazilian real per U.S.dollar.
If purchasing power parity holds,about what should the nominal exchange rate have been at the end of 2011? Show your work.

Accepted Answer

1.7(1.066)...

Question 5

What does purchasing-power parity imply about the real exchange rate?

Accepted Answer

That it is equal to one.The nu...

Question 6

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's hot chocolate per cup of U.S.hot chocolate
D)   None of the above is correct.E) C) and D)
F) A) and D)

Question 7

If the number of Japanese yen a dollar buys falls,but neither country's price level changes,then the real exchange rate

Accepted Answer

A)   depreciates which causes U.S.net exports to increase.
B)   depreciates which causes U.S.net exports to decrease.
C)   appreciates which causes U.S.net exports to increase.
D)   appreciates,which causes U.S.net exports to decrease.E) None of the above
F) C) and D)

Question 8

If a country sells more goods and services abroad than it purchases abroad,it has positive net exports and a trade surplus.

Accepted Answer

A) True 
 B)False

Question 9

If the U.S.real exchange rate appreciates,U.S.exports to Europe

Accepted Answer

A)   and European exports to the U.S.both rise.
B)   and European exports to the U.S.both fall.
C)   rise,and European exports to the U.S.fall.
D)   fall,and European exports to the U.S.rise.E) A) and B)
F) A) and C)

Question 10

It is possible for a country to have domestic investment that exceeds national saving.

Accepted Answer

A) True 
 B)False

Question 11

If the dollar buys less cotton in Egypt than in the United States,then traders could make a profit by

Accepted Answer

A)   buying cotton in the United States and selling it in Egypt,which would tend to raise the price of cotton in the United States.
B)   buying cotton in the United States and selling it in Egypt,which would tend to raise the price of cotton in Egypt.
C)   buying cotton in Egypt and selling it in the United States,which would tend to raise the price of cotton in Egypt.
D)   buying cotton in Egypt and selling it in the United States,which would tend to raise the price of cotton in the United States.E) B) and C)
F) A) and B)

Question 12

The large trade deficits in the United States in the 1990s were primarily associated with a rise in domestic investment rather than a rise in the budget deficit.

Accepted Answer

A) True 
 B)False

Question 13

If the exchange rate changes from .8 euros per dollar to .9 euros per dollar,

Accepted Answer

A)   the dollar depreciates so U.S.goods become less expensive relative to foreign goods.
B)   the dollar depreciates so U.S.goods become more expensive relative to foreign goods.
C)   the dollar appreciates so U.S.goods become less expensive relative to foreign goods.
D)   the dollar appreciates so U.S.goods become more expensive relative to foreign goods.E) None of the above
F) All of the above

Question 14

Table 18-2
 
-Refer to Table 18-2.In real terms,U.S.goods are more expensive than goods in which country(ies) ?

Accepted Answer

A)   Bolovia and Morocco
B)   Japan,Norway,and Thailand
C)   Japan and Norway
D)   ThailandE) C) and D)
F) All of the above

Question 15

Perhaps the most dramatic change in the U.S.economy over the past four decades has been the increasing relative importance of international trade and finance.

Accepted Answer

A) True 
 B)False

Question 16

A U.S.purchase of oil from overseas paid for with foreign currency it already owned

Accepted Answer

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

Question 17

During some year a country had exports of $50 billion,imports of $70 billion,and domestic investment of $100 billion.What was its saving during the year?

Accepted Answer

A)   $80 billion
B)   $100 billion
C)   $120 billion
D)   $150 billionE) B) and C)
F) A) and B)

Question 18

According to purchasing-power parity,if a basket of goods costs $100 in the U.S.and the same basket costs 800 pesos in Argentina,then what is the nominal exchange rate?

Accepted Answer

A)   8 pesos per dollar
B)   1 peso per dollar
C)   1/8 peso per dollar
D)   none of the above is correctE) All of the above
F) A) and C)

Question 19

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

Accepted Answer

A)   raise both U.S.net exports and U.S.net capital outflows.
B)   raise U.S.net exports and lower U.S.net capital outflows.
C)   lower both U.S.net exports and U.S.net capital outflows.
D)   lower U.S.net exports and raise U.S.net capital outflows.E) None of the above
F) A) and D)

Question 20

From 1970 to 1998 the U.S.dollar

Accepted Answer

A)   gained value compared to the Italian lira because inflation was higher in the U.S.
B)   gained value compared to the Italian lira because inflation was lower in the U.S.
C)   lost value compared to the Italian lira because inflation was higher in the U.S.
D)   lost value compared to the Italian lira because inflation was lower in the U.S.E) A) and D)
F) A) and B)

Exam 31: Open-Economy Macroeconomic Models

If the exchange rate changes from .8 euros per dollar to .9 euros per dollar,

Correct Answer
verified

The large trade deficits in the United States in the 1990s were primarily associated with a rise in domestic investment rather than a rise in the budget deficit.

Correct Answer
verified

If a country sells more goods and services abroad than it purchases abroad,it has positive net exports and a trade surplus.

Correct Answer
verified

During some year a country had exports of $50 billion,imports of $70 billion,and domestic investment of $100 billion.What was its saving during the year?

Correct Answer
verified

Table 18-2 -Refer to Table 18-2.In real terms,U.S.goods are more expensive than goods in which country(ies) ?

Correct Answer
verified

If a dollar buys more rice in the China.than in the U.S. ,then

Correct Answer
verified

A U.S.purchase of oil from overseas paid for with foreign currency it already owned

Correct Answer
verified

If the number of Japanese yen a dollar buys falls,but neither country's price level changes,then the real exchange rate

Correct Answer
verified

Carl and Carly are American residents.Carl buys stock of a corporation in Austria.Carly opens a coffee shop in Austria.Whose purchase,by itself,decreases Austria's net capital outflow?

Correct Answer
verified

Perhaps the most dramatic change in the U.S.economy over the past four decades has been the increasing relative importance of international trade and finance.

Correct Answer
verified

If the dollar buys less cotton in Egypt than in the United States,then traders could make a profit by

Correct Answer
verified

If the exchange rate changes from 148 Kazakhstan tenge per dollar to 155 Kazakhstan tenge per dollar,the dollar has

Correct Answer
verified

From 1970 to 1998 the U.S.dollar

Correct Answer
verified

According to purchasing-power parity,if a basket of goods costs $100 in the U.S.and the same basket costs 800 pesos in Argentina,then what is the nominal exchange rate?

Correct Answer
verified

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

Correct Answer
verified

If the U.S.real exchange rate appreciates,U.S.exports to Europe

Correct Answer
verified

It is possible for a country to have domestic investment that exceeds national saving.

Correct Answer
verified

Correct Answer
verified
1.7(1.066)...
View 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 Answer
verified

What does purchasing-power parity imply about the real exchange rate?

Correct Answer
verified
That it is equal to one.The nu...
View Answer

Exam 31: Open-Economy Macroeconomic Models

If the exchange rate changes from .8 euros per dollar to .9 euros per dollar,

Correct AnswerverifiedShow Answer

The large trade deficits in the United States in the 1990s were primarily associated with a rise in domestic investment rather than a rise in the budget deficit.

Correct AnswerverifiedShow Answer

If a country sells more goods and services abroad than it purchases abroad,it has positive net exports and a trade surplus.

Correct AnswerverifiedShow Answer

During some year a country had exports of $50 billion,imports of $70 billion,and domestic investment of $100 billion.What was its saving during the year?

Correct AnswerverifiedShow Answer

Table 18-2 -Refer to Table 18-2.In real terms,U.S.goods are more expensive than goods in which country(ies) ?

Correct AnswerverifiedShow Answer

If a dollar buys more rice in the China.than in the U.S. ,then

Correct AnswerverifiedShow Answer

A U.S.purchase of oil from overseas paid for with foreign currency it already owned

Correct AnswerverifiedShow Answer

If the number of Japanese yen a dollar buys falls,but neither country's price level changes,then the real exchange rate

Correct AnswerverifiedShow Answer

Carl and Carly are American residents.Carl buys stock of a corporation in Austria.Carly opens a coffee shop in Austria.Whose purchase,by itself,decreases Austria's net capital outflow?

Correct AnswerverifiedShow Answer

Perhaps the most dramatic change in the U.S.economy over the past four decades has been the increasing relative importance of international trade and finance.

Correct AnswerverifiedShow Answer

If the dollar buys less cotton in Egypt than in the United States,then traders could make a profit by

Correct AnswerverifiedShow Answer

If the exchange rate changes from 148 Kazakhstan tenge per dollar to 155 Kazakhstan tenge per dollar,the dollar has

Correct AnswerverifiedShow Answer

From 1970 to 1998 the U.S.dollar

Correct AnswerverifiedShow Answer

According to purchasing-power parity,if a basket of goods costs $100 in the U.S.and the same basket costs 800 pesos in Argentina,then what is the nominal exchange rate?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If the U.S.real exchange rate appreciates,U.S.exports to Europe

Correct AnswerverifiedShow Answer

It is possible for a country to have domestic investment that exceeds national saving.

Correct AnswerverifiedShow Answer

Correct Answerverified1.7(1.066)...View AnswerShow 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

What does purchasing-power parity imply about the real exchange rate?

Correct AnswerverifiedThat it is equal to one.The nu...View AnswerShow Answer

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1.7(1.066)...
View Answer

Correct Answer
verified

Correct Answer
verified
That it is equal to one.The nu...
View Answer