ECON202 Ch. 18
A country has $3 billion of domestic investment and net exports of $2 billion. What is its savings?
$5 billion
Other things the same, which of the following could explain a rise in Sweden's net capital outflow?
-Interest rates on Swedish bonds rise. **The probability of default on Swedish bonds rises. -Sweden enacts a law reducing taxes on income earned by foreign-owned businesses operating in Sweden.
If the exchange rate is 5 Egyptian pounds per US dollar, a watch that costs $25 US dollars costs...
125 Egyptian pounds.
Matt and Melinda are American residents. Matt buys stock issued by a German corporation. Melinda opens a shoe factory in Panama. Whose purchase, by itself, increases the US's net capital outflow?
Both Matt and Melinda's.
If Chileans buy more US stocks and bonds and US residents buy more Chilean wine, then...
Both US net exports and US net capital outflows fall.
Other things the same, if the exchange rate changes from 30 Thai bhat per dollar to 25 Thai bhat per dollar, then the dollar has...
Depreciated and so buys fewer Thai goods.
Purchasing-power parity theory does not hold at all times because...
-Many goods are not easily transported. -The same goods produced in different countries may be imperfect substitutes for each other.
An MP3 player in Singapore costs 200 Singaporean dollars. In the US, it costs $100 US dollars. What is the nominal exchange rate if purchasing-power parity holds?
2
Dave, a US citizen, buys a bicycle manufactured in China. Dave's purchase is...
A US import and a Chinese export.
If purchasing-power parity holds, a dollar will buy...
As many goods in foreign countries as it does in the US.
If business opportunities in a country become relatively less attractive relative to those of other countries, then...
Both its net exports and net capital outflows rise.
Bob traps lobsters in Maine and sells them to a restaurant in Mexico. Other things the same, these sales...
Increase US net exports and decrease Mexican net exports.
Other things the same, which of the following could be a consequence of an appreciation of the US real exchange rate?
Nick, a US citizen, decides that the trip to Nepal he's been thinking about is now affordable.
According to the theory of purchasing-power parity, the nominal exchange rate between two countries must reflect the differing...
Price levels in those countries.
Other things the same, the real exchange rate between US and Belgian goods would be higher if...
Prices in the US were higher, or the number of euro the dollar purchased were higher.
Suppose that foreign citizens decide to purchase more US pharmaceuticals and US citizens decide to buy more stock in foreign corporations. Other things the same, these actions...
Raise both US net exports and US net capital outflows.
If a country has Y > C + I + G, then...
S > I and it has a trade surplus.
If US exports are $300 billion and US imports total $350 billion, which of the following is correct?
The US has a trade deficit of $50 billion.
You are planning a graduation trip to Mexico. Other things the same, if the dollar appreciates relative to the peso, then...
The dollar buys more pesos. Your hotel room in Mexico will require fewer dollars.
During 2011, the price level in the US rose at a faster rate than the price level in Japan. Other things the same, according to purchasing-power parity, this difference in inflation rates should have caused...
The nominal exchange rate of the dollar to depreciate relative to the yen.
