macro ch18 quiz

A U.S. company uses pound sterlings it already owned to purchase bonds issued by a company in Germany. Which of these countries has an increase in net capital outflow?

Neither Germany nor the U.S

Which of the following equations is correct? a. S = I + C b. S = I + NCO c. S = I − NX d. S = NX − NCO

S = I + NCO

An open economy's GDP can be expressed by

Y = C + I + G + NX

Other things the same, if the exchange rate changes from 35 Thai bhat per dollar to 21 Thai bhat per dollar, then the dollar has

depreciated and so buys fewer Thai goods

The purchase of U.S. government bonds by Japanese is an example of

foreign portfolio investment by Japanese

Purchasing-power parity theory does not hold at all times because

many goods are not easily transported and the same goods produced in different countries may be imperfect substitutes

If the value of goods and services that Mexico purchases from the United States is greater than the value of goods and services that the United States purchases from Mexico , then the United States has

positive net exports and a trade surplus with Mexico

If the nominal exchange rate is expressed as foreign currency per dollar, which of the following would both make Americans more willing to buy Italian goods? The nominal exchange rate

rises, the price of goods in Italy falls

If saving is greater than domestic investment, then there is a trade

surplus and Y > C + I + G

Which of the following is an example of U.S. foreign direct investment? a. A Swiss bank buys a U.S. government bond. b. A U.S. based restaurant chain opens new restaurants in India. c. A U.S. bank buys bonds issued by an Australian corporation. d. A Swedish car manufacturer opens a plant in Tennessee.

A U.S. based restaurant chain opens new restaurants in India