Question 1

If the real exchange rate between the U.S.and Argentina is 1,then

Accepted Answer

A)   purchasing-power parity holds,and 1 U.S.dollar buys 1 Argentinean bolivar.
B)   purchasing power parity holds,and the amount of dollars needed to buy goods in the U.S.is the same as the amount needed to buy enough Argentinean bolivars to buy the same goods in Argentina.
C)   purchasing power parity does not hold,but 1 U.S.dollar buys 1 Argentinean bolivar.
D)   purchasing power parity does not hold,but the amount of dollars needed to buy goods in the U.S.is the same as the amount needed to buy enough Argentinean bolivars to buy the same goods in Argentina.E) C) and D)
F) B) and D)

Question 2

If business opportunities in a country become relatively less attractive relative to those of other countries,then

Accepted Answer

A)   both its net exports and net capital outflows fall.
B)   both its net exports and net capital outflows rise.
C)   its net exports fall and its net capital outflows fall.
D)   its net exports rise and its net capital outflows fallE) B) and C)
F) A) and C)

Question 3

A country has $20 billion of domestic investment and net capital outflow of $10 billion.What is saving?

Accepted Answer

A)   $10 billion
B)   $30 billion
C)   -$20 billion
D)   -$30 billionE) A) and B)
F) A) and C)

Question 4

After the 1980s,U.S.net capital outflow was

Accepted Answer

A)   negative,meaning that foreigners were buying more capital assets from the United States than Americans were buying abroad.
B)   negative,meaning that Americans were buying more capital assets abroad than foreigners were buying from the United States.
C)   positive,meaning that foreigners were buying more capital assets from the United States than Americans were buying abroad.
D)   positive,meaning that Americans were buying more capital assets abroad than foreigners were buying from the United States.E) A) and B)
F) B) and D)

Question 5

When Microsoft establishes a distribution center in France,U.S.net capital outflow

Accepted Answer

A)   increases because Microsoft makes a portfolio investment in France.
B)   decreases because Microsoft makes a portfolio investment in France.
C)   increases because Microsoft makes a direct investment in capital in France.
D)   decreases because Microsoft makes a direct investment in capital France.E) C) and D)
F) B) and C)

Question 6

Other things the same,an increase in the nominal exchange rate raises the real exchange rate.

Accepted Answer

A) True 
 B)False

Exam 31: Open-Economy Macroeconomics: Basic Concepts

A country has $20 billion of domestic investment and net capital outflow of $10 billion.What is saving?

Correct Answer
verified

If business opportunities in a country become relatively less attractive relative to those of other countries,then

Correct Answer
verified

Other things the same,an increase in the nominal exchange rate raises the real exchange rate.

Correct Answer
verified

If the real exchange rate between the U.S.and Argentina is 1,then

Correct Answer
verified

After the 1980s,U.S.net capital outflow was

Correct Answer
verified

When Microsoft establishes a distribution center in France,U.S.net capital outflow

Correct Answer
verified

Exam 31: Open-Economy Macroeconomics: Basic Concepts

A country has $20 billion of domestic investment and net capital outflow of $10 billion.What is saving?

Correct AnswerverifiedShow Answer

If business opportunities in a country become relatively less attractive relative to those of other countries,then

Correct AnswerverifiedShow Answer

Other things the same,an increase in the nominal exchange rate raises the real exchange rate.

Correct AnswerverifiedShow Answer

If the real exchange rate between the U.S.and Argentina is 1,then

Correct AnswerverifiedShow Answer

After the 1980s,U.S.net capital outflow was

Correct AnswerverifiedShow Answer

When Microsoft establishes a distribution center in France,U.S.net capital outflow

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified