Homework Answers
In a small open economy , if the world interest rate increases , then the supply of domestic currency on the foreign exchange market will increase because it would be beneficial and the real exchange rate will decrease, holding all else constant. Hence,option(C) is correct.
Add Answer to:
22. In a small open economy, if the world interest rate increases, then the supply of domestic currency on the forei...
39. In a small open economy, if the world interest rate falls, then domestic investment will _and the real exchange...
39. In a small open economy, if the world interest rate falls, then domestic investment will _and the real exchange rate will holding all else constant. A) decrease; decrease B) decrease; increase C) increase; decrease D) increase; increase
(1) If the world price is above the domestic equilibrium price, the domestic country is likely...
(1)
If the world price is above the domestic equilibrium price, the
domestic country is likely to ____________________ the good.
(2)
The difference between what an economy sells to and buys from
foreigners is _________________.
(3)
The idea that exchange rates and prices adjust to equalize the
cost of living across international boundaries is called
__________________________.
(4)
In the graph below, when the world price is $3, how many units
are...
Exhibit: IS*–LM* and AD A small open economy with a floating exchange rate is initially in...
Exhibit: IS*–LM* and AD A small open economy with a floating exchange rate is initially in equilibrium at A with IS1*, LM1*. Holding all else constant, if the domestic price level increases, then the _____ curve will shift to _____. A. IS1*; IS2* B. IS1*; IS3* C. LM1*; LM2* D. LM1*; LM3*
1) The price of one currency in terms of another is called A)...
1) The price of one currency in terms of another is called A) the exchange rate. B) purchasing power parity. C) the terms of trade. D) a currency band. 2) The three policies which cannot be maintained simultaneously by a nation (sometimes referred to as the "trilemma") do NOT include A) independent control of the money supply. B) independent control of fiscal policy. C) free flow of capital. D) fixed exchange rates 3) The foreign exchange rate refers to A) the rate of change in...
8. In a small open economy, if the world real interest rate is above the rate...
8. In a small open economy, if the world real interest rate is above the rate at which national saving exceeds domestic investment, then there will be a trade _and net capital outflow. A) surplus; negative B) deficit; positive C) surplus, positive D) deficit; negative
8) In the small open economy in the long run model, Savings is A) dependent on...
8) In the small open economy in the long run model, Savings is A) dependent on the real interest rate B) influenced by Tariffs. C) independent of the real interest rate D) determined by Liquidity Preferences 9) In the small open economy, the real interest rate increases when: A) net exports increase. B) expected inflation increases C) a large foreign country cuts taxes. D) net export decreases. 10) The inflation rate will increase when all the following happens except: A)...
QUICK CHECK multiple choice 1. Holding other things constant, an increase in the world interest rate...
QUICK CHECK multiple choice 1. Holding other things constant, an increase in the world interest rate increases which of the following? a. national saving and domestic investment b. national saving and the net capital outflow c. domestic investment and the net capital outflow d. national saving only 2. An appreciation of a nation's currency can be the result of which of the following? a. an increase in net exports b. a decrease in net exports c. a fall in national...
Question 3 (a) State theuncovered interest rate parity condition. (b) Consider an open economy with a...
Question 3 (a) State theuncovered interest rate parity condition. (b) Consider an open economy with a domestic interest rate of i, 3%, a nominal exchange rate between the domestic and foreign economy of E, =2, and where the foreign interest rate is i2%. In this case according to the "interest rate parity" what is the markets expectation of the future exchange rate E? (c) Consider an open economy with a domestic interest rate of i, 5 %, a nominal exchange...
According to the open economy macroeconomic model, which of the following statements is (are) correct? (x)...
According to the open economy macroeconomic model, which of the following statements is (are) correct? (x) The usual effects of capital flight include a rightward shift of demand in the loanable funds market and a rightward shift of the NCO curve, (y) Capital flight typically causes a decrease in the domestic interest rate and an increase in NCO. (z) Capital flight typically causes the real exchange rate of the domestic currency to depreciate because capital flight causes an increase in...
In the open-economy macroeconomic model, if the supply of loanable funds shifts right Group of answer...
In the open-economy macroeconomic model, if the supply of loanable funds shifts right Group of answer choices the interest rate falls and the supply of dollars in the market for foreign-currency exchange shifts right. the interest rate falls and the supply of dollars in the market for foreign currency exchange shifts left. the interest rate rises and the demand for dollars in the market for foreign currency exchange shifts right. the interest rate rises and the demand for dollars in...
39. In a small open economy, if the world interest rate falls, then domestic investment will _and the real exchange rate will holding all else constant. A) decrease; decrease B) decrease; increase C) increase; decrease D) increase; increase
(1)
If the world price is above the domestic equilibrium price, the
domestic country is likely to ____________________ the good.
(2)
The difference between what an economy sells to and buys from
foreigners is _________________.
(3)
The idea that exchange rates and prices adjust to equalize the
cost of living across international boundaries is called
__________________________.
(4)
In the graph below, when the world price is $3, how many units
are...
1) The price of one currency in terms of another is called A) the exchange rate. B) purchasing power parity. C) the terms of trade. D) a currency band. 2) The three policies which cannot be maintained simultaneously by a nation (sometimes referred to as the "trilemma") do NOT include A) independent control of the money supply. B) independent control of fiscal policy. C) free flow of capital. D) fixed exchange rates 3) The foreign exchange rate refers to A) the rate of change in...
8. In a small open economy, if the world real interest rate is above the rate at which national saving exceeds domestic investment, then there will be a trade _and net capital outflow. A) surplus; negative B) deficit; positive C) surplus, positive D) deficit; negative
QUICK CHECK multiple choice 1. Holding other things constant, an increase in the world interest rate increases which of the following? a. national saving and domestic investment b. national saving and the net capital outflow c. domestic investment and the net capital outflow d. national saving only 2. An appreciation of a nation's currency can be the result of which of the following? a. an increase in net exports b. a decrease in net exports c. a fall in national...
Question 3 (a) State theuncovered interest rate parity condition. (b) Consider an open economy with a domestic interest rate of i, 3%, a nominal exchange rate between the domestic and foreign economy of E, =2, and where the foreign interest rate is i2%. In this case according to the "interest rate parity" what is the markets expectation of the future exchange rate E? (c) Consider an open economy with a domestic interest rate of i, 5 %, a nominal exchange...
Most questions answered within 3 hours.
-
I need to rewrite this lambda function into a def function using
python.
mp is an...
asked 4 minutes ago -
In using the sales comparison approach to determine the current
value of the subject property, it...
asked 7 minutes ago -
Research examples of how water treatment practices and
systems are being utilized across the globe and...
asked 10 minutes ago -
2) A board with a mass of 6 kg, which is 5 meters long, rests on...
asked 11 minutes ago -
Which of the following is a benefit under the Employee
Retirement Income Security Act guidelines for...
asked 13 minutes ago -
A baby bounces up and down in her crib. Her mass is 13.0 kg, and
the...
asked 22 minutes ago -
In C programming language,
Use Bitwise operations to do the operations below. Assume all
variables are...
asked 24 minutes ago -
a)Explain all possible basic strategies needed to work
Kirchhoff's voltage and current law questions of circuits.Not...
asked 25 minutes ago -
1. The Clothes Clutch, a retail clothier, has had average sales
of $400,000 for the last...
asked 29 minutes ago -
the accounting department for a firm has provided a cost
function C(x)=280z+6440. The sales department has...
asked 39 minutes ago -
A catapult on a cliff launches a large round rock towards a ship
on the ocean...
asked 42 minutes ago -
A market research firm reported that the mean annual earning of
all family practitioners in the...
asked 51 minutes ago