Question 1

Which of the following is consistent with capital flight from Mexico?

Accepted Answer

A)  Mexican net exports decrease.
B)  Mexican investment increases.
C)  Mexican savings increase.
D)  Mexican real interest rate decreases.E) None of the above
F) A) and C)

Question 2

Which of the following best predicts the effects of a fall in the Canadian real interest rate?

Accepted Answer

A)  Owning Canadian assets becomes less attractive, and net capital outflow rises.
B)  Owning Canadian assets becomes less attractive, and net capital outflow falls.
C)  Owning Canadian assets becomes more attractive, and net capital outflow rises.
D)  Owning Canadian assets becomes more attractive, and net capital outflow falls.E) C) and D)
F) A) and D)

Question 3

Although trade policies do not affect a country's overall trade balance,they do affect specific firms and industries.

Accepted Answer

A) True 
 B)False

Question 4

In an open economy,the demand for loanable funds comes from both domestic investment and net capital outflow.

Accepted Answer

A) True 
 B)False

Question 5

If Canada imposes an import quota on clothing,which of the following best predicts the consequences?

Accepted Answer

A)  Canadian exports increase, imports increase, and net exports are unchanged.
B)  Canadian exports increase, imports decrease, and net exports increase.
C)  Canadian exports decrease, imports increase, and net exports decrease.
D)  Canadian exports decrease, imports decrease, and net exports are unchanged.E) A) and D)
F) A) and C)

Question 6

When Mexico suffered from capital flight in 1994,what happened to Mexico's net capital outflow and net exports?

Accepted Answer

A)  The net capital outflow and net exports decreased.
B)  The net capital outflow and net exports increased.
C)  The net capital outflow increased while net exports decreased.
D)  The net capital outflow decreased while net exports increased.E) None of the above
F) B) and D)

Question 7

If the world real interest rate exceeds the interest rate that would occur if the Canadian economy were closed,then the Canadian net capital outflow will be which of the following?

Accepted Answer

A)  positive
B)  negative
C)  decreasing
D)  increasingE) C) and D)
F) None of the above

Question 8

If the real exchange rate of the Canadian dollar were above its equilibrium level,the real exchange rate of the Canadian dollar would appreciate.

Accepted Answer

A) True 
 B)False

Question 9

In an open economy,which of the following does the market for loanable funds take as given?

Accepted Answer

A)  saving
B)  investment
C)  exchange rate
D)  real interest rateE) A) and C)
F) A) and B)

Exam 13: A Macroeconomic Theory of the Small Open Economy

Which of the following best predicts the effects of a fall in the Canadian real interest rate?

Correct Answer
verified

Although trade policies do not affect a country's overall trade balance,they do affect specific firms and industries.

Correct Answer
verified

If the world real interest rate exceeds the interest rate that would occur if the Canadian economy were closed,then the Canadian net capital outflow will be which of the following?

Correct Answer
verified

If the real exchange rate of the Canadian dollar were above its equilibrium level,the real exchange rate of the Canadian dollar would appreciate.

Correct Answer
verified

Which of the following is consistent with capital flight from Mexico?

Correct Answer
verified

If Canada imposes an import quota on clothing,which of the following best predicts the consequences?

Correct Answer
verified

In an open economy,which of the following does the market for loanable funds take as given?

Correct Answer
verified

In an open economy,the demand for loanable funds comes from both domestic investment and net capital outflow.

Correct Answer
verified

When Mexico suffered from capital flight in 1994,what happened to Mexico's net capital outflow and net exports?

Correct Answer
verified

Exam 13: A Macroeconomic Theory of the Small Open Economy

Which of the following best predicts the effects of a fall in the Canadian real interest rate?

Correct AnswerverifiedShow Answer

Although trade policies do not affect a country's overall trade balance,they do affect specific firms and industries.

Correct AnswerverifiedShow Answer

If the world real interest rate exceeds the interest rate that would occur if the Canadian economy were closed,then the Canadian net capital outflow will be which of the following?

Correct AnswerverifiedShow Answer

If the real exchange rate of the Canadian dollar were above its equilibrium level,the real exchange rate of the Canadian dollar would appreciate.

Correct AnswerverifiedShow Answer

Which of the following is consistent with capital flight from Mexico?

Correct AnswerverifiedShow Answer

If Canada imposes an import quota on clothing,which of the following best predicts the consequences?

Correct AnswerverifiedShow Answer

In an open economy,which of the following does the market for loanable funds take as given?

Correct AnswerverifiedShow Answer

In an open economy,the demand for loanable funds comes from both domestic investment and net capital outflow.

Correct AnswerverifiedShow Answer

When Mexico suffered from capital flight in 1994,what happened to Mexico's net capital outflow and net exports?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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