Econ. Test 3

Positive net exports, positive net capital outflows

If a country's purchases of foreign assets exceeds foreign purchases of domestic assets, that country has

Either public saving or private saving is greater than zero Y-C-G>0 Investment is positive

If national saving in a closed economy is greater than zero, what is true?

Percentage change in the consumer price index

Inflation can be measured by the

Surplus of labor, structural unemployment

Minimum wages create unemployment in markets where they create a

People want to lend more, the quantity of loanable funds supplied increase

Other things the same, when the interest rate rises,

Increase in unemployment due to job search

Sectoral shifts in demand for output

Real and nominal salary have risen

An associate professor gets a $200 a month raise. She figures that with her new salary she can buy more goods and services than she could buy last year, what has happened?

Reduces net exports and domestic investment

An increase in the budget deficit

Decreases, so the value of money rises

When thrice level falls, the number of dollars needed to buy a representative basket of goods

Desired net exports but no desired net capital outflow

If the exchange rate rises, what falls in the open-economy macroeconomic model?

Tightly control the money supply

In order to maintain stable prices, a central bank must

Either U.S. Imports decrease or exports increase

In the open economy macroeconomic model,, the amount of dollars demanded in the market for foreign-currency exchange at a given real exchange rate increases if

Net capital outflow

In the open-economy macroeconomic model, the supply of dollars in the market for foreign-currency exchange comes from

Exchange rates in the long-run

Purchasing power parity describes the forces that determine

Match one person's saving with another person's investment

The primary economic function of the financial system is to

Negative relation between the real interest rate and investment

The slope of the demand for loanable funds curve represents the

Positive relation between the real interest rate and savings

The slope of the supply of loanable funds curve represents the

Saving and the source of demand for loanable funds is investment

The source of the supply of loanable funds is

A U.S. Import and Chinese export

Dave, a U.S. Citizen buys a bicycle manufactured in China. Dave's purchase is

Above equilibrium, and profits are higher than otherwise

Paying efficiency wages means that wages are

It may be in the best interest of firms to offer wages that are above the equilibrium price

The theory of efficiency wages explains why

Change reserves or change the reserve ratio

What can the Fed do to change the money supply?

Imports fall, and it's net exports are unchanged

When a country imposes an import quota, it's

Buys government bonds from the public

When the federal reserve conducts open-market operations to increase the money supply, it