Question 1

Which of the following would be U.S.foreign direct investment?

Accepted Answer

A)  A Swedish car manufacturer opens a plant in Tennessee.
B)  A Dutch citizen buys shares of stock in a U.S.company.
C)  A U.S.based hotel chain opens a new hotel in Brazil.
D)  A U.S.citizen buys stock in companies located in Japan.E) A) and B)
F) B) and C)

Question 2

Sue,a U.S.citizen,buys stock in an Italian automobile corporation.Her purchase counts as

Accepted Answer

A)  investment for Sue and U.S.foreign direct investment.
B)  investment for Sue and U.S.foreign portfolio investment.
C)  saving for Sue and U.S.foreign direct investment.
D)  saving for Sue and U.S.foreign portfolio investment.E) B) and C)
F) C) and D)

Question 3

A Venezuelan firm purchases earth-moving equipment from a U.S.company and pays for it with Venezuelan currency.This transaction

Accepted Answer

A)  increases U.S.net exports, and increases Venezuelan net capital outflow.
B)  increases U.S.net exports, and decreases Venezuelan net capital outflow.
C)  decreases U.S.net exports, and increases Venezuelan net capital outflow.
D)  decreases U.S.net exports, and decreases Venezuelan net capital outflow.E) A) and D)
F) A) and C)

Question 4

When Microsoft establishes a distribution center in France,U.S.net capital outflow

Accepted Answer

A)  increases because Microsoft makes a portfolio investment in France.
B)  decreases because Microsoft makes a portfolio investment in France.
C)  increases because Microsoft makes a direct investment in capital in France.
D)  decreases because Microsoft makes a direct investment in capital France.E) A) and D)
F) A) and C)

Question 5

Other things the same,if the exchange rate changes from .30 Kuwaiti dinar per dollar to .35 Kuwaiti dinar per dollar,the dollar has

Accepted Answer

A)  appreciated and so buys more Kuwaiti goods.
B)  appreciated and so buys fewer Kuwaiti goods.
C)  depreciated and so buys more Kuwaiti goods.
D)  depreciated and so buys fewer Kuwaiti goods.E) A) and B)
F) All of the above

Question 6

When Ghana sells chocolate to the United States,U.S.net exports

Accepted Answer

A)  increase, and U.S.net capital outflow increases.
B)  increase, and U.S.net capital outflow decreases.
C)  decrease, and U.S.net capital outflow increases.
D)  decrease, and U.S.net capital outflow decreases.E) B) and C)
F) C) and D)

Question 7

Net capital outflow measures

Accepted Answer

A)  foreign assets held by domestic residents minus domestic assets held by foreign residents.
B)  the imbalance between the amount of foreign assets bought by domestic residents and the amount of domestic assets bought by foreigners.
C)  the imbalance between the amount of foreign assets bought by domestic residents and the amount of domestic goods and services sold to foreigners.
D)  None of the above is correct.E) A) and D)
F) B) and D)

Question 8

Given the fact that citizens of a country are not saving much,it is better to

Accepted Answer

A)  force citizens to save.
B)  reduce investment.
C)  have foreigners invest in the domestic economy than no one at all.
D)  to prevent opportunities for citizens to buy capital assets abroad.E) A) and B)
F) C) and D)

Question 9

For many macroeconomic questions concerning large economies,international issues are not of primary importance.

Accepted Answer

A) True 
 B)False

Question 10

A country sells more to foreign countries than it buys from them.It has

Accepted Answer

A)  a trade surplus and positive net exports.
B)  a trade surplus and negative net exports.
C)  a trade deficit and positive net exports.
D)  a trade deficit and negative net exports.E) A) and B)
F) C) and D)

Question 11

Net exports of a country are the value of

Accepted Answer

A)  goods and services imported minus the value of goods and services exported.
B)  goods and services exported minus the value of goods and services imported.
C)  goods exported minus the value of goods imported.
D)  goods imported minus the value of goods exported.E) A) and C)
F) All of the above

Question 12

Use the (hypothetical)  information in the following table to answer the following questions.
Table 31-1
 
-Refer to Table 31-1.In real terms,U.S.goods are less expensive than goods in which country(ies) ?

Accepted Answer

A)  Bolivia and Morocco
B)  Japan, Norway, and Thailand
C)  Japan and Norway
D)  ThailandE) All of the above
F) A) and D)

Question 13

Which of the following is correct? Over about the last fifty years

Accepted Answer

A)  U.S.exports and U.S.imports each about doubled.
B)  U.S.exports and U.S.imports each about tripled.
C)  U.S.exports about doubled and U.S.imports about tripled.
D)  U.S.exports about tripled and U.S.imports about doubled.E) C) and D)
F) B) and D)

Question 14

A country has $100 million of net exports and $170 million of saving.Net capital outflow is

Accepted Answer

A)  $70 million and domestic investment is $170 million.
B)  $70 million and domestic investment is $270 million.
C)  $100 million and domestic investment is $70 million.
D)  None of the above is correct.E) None of the above
F) A) and D)

Question 15

If the U.S.real exchange rate appreciates,U.S.net exports

Accepted Answer

A)  increase and U.S.net capital outflow decreases.
B)  decrease and U.S.net capital outflow increases.
C)  and U.S.net capital outflow both increase.
D)  and U.S.net capital outflow both decrease.E) All of the above
F) A) and D)

Question 16

If you were told that the exchange rate was 1.2 Canadian dollars per U.S.dollar,a watch that costs $12 US dollars would cost

Accepted Answer

A)  $8.5 Canadian dollars.
B)  $10 Canadian dollars.
C)  $12.20 Canadian dollars.
D)  $14.40 Canadian dollars.E) All of the above
F) A) and D)

Question 17

A country with negative net exports has a trade surplus.

Accepted Answer

A) True 
 B)False

Question 18

If a country sells more goods and services abroad than it purchases abroad,it has positive net exports and a trade surplus.

Accepted Answer

A) True 
 B)False

Question 19

The increase in international trade in the United States is partly due to

Accepted Answer

A)  improvements in transportation.
B)  advances in telecommunications.
C)  increased trade of goods with a high value per pound.
D)  All of the above are correct.E) A) and D)
F) B) and D)

Question 20

The country of Sylvania has a GDP of $900,investment of $200,government purchases of $200,and net capital outflow of negative $100.This means that

Accepted Answer

A)  consumption equals $700.
B)  consumption equals $600.
C)  consumption equals $500.
D)  saving equals $300.E) A) and B)
F) A) and C)

Exam 31: Open-Economy Macroeconomics: Basic Concepts

Sue,a U.S.citizen,buys stock in an Italian automobile corporation.Her purchase counts as

Correct AnswerverifiedShow Answer

A country has $100 million of net exports and $170 million of saving.Net capital outflow is

Correct AnswerverifiedShow Answer

For many macroeconomic questions concerning large economies,international issues are not of primary importance.

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Which of the following would be U.S.foreign direct investment?

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If the U.S.real exchange rate appreciates,U.S.net exports

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Given the fact that citizens of a country are not saving much,it is better to

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When Ghana sells chocolate to the United States,U.S.net exports

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If you were told that the exchange rate was 1.2 Canadian dollars per U.S.dollar,a watch that costs $12 US dollars would cost

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A country sells more to foreign countries than it buys from them.It has

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Net exports of a country are the value of

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When Microsoft establishes a distribution center in France,U.S.net capital outflow

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Which of the following is correct? Over about the last fifty years

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Other things the same,if the exchange rate changes from .30 Kuwaiti dinar per dollar to .35 Kuwaiti dinar per dollar,the dollar has

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A Venezuelan firm purchases earth-moving equipment from a U.S.company and pays for it with Venezuelan currency.This transaction

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The country of Sylvania has a GDP of $900,investment of $200,government purchases of $200,and net capital outflow of negative $100.This means that

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A country with negative net exports has a trade surplus.

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If a country sells more goods and services abroad than it purchases abroad,it has positive net exports and a trade surplus.

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The increase in international trade in the United States is partly due to

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Use the (hypothetical) information in the following table to answer the following questions. Table 31-1 -Refer to Table 31-1.In real terms,U.S.goods are less expensive than goods in which country(ies) ?

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Net capital outflow measures

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