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In: Economics

In the open economy macroeconomic model, which of the following is included in the supply of...

In the open economy macroeconomic model, which of the following is included in the supply of U.S. dollars in the market for foreign-currency?
(x) Nebraska Life, a U.S. life insurance company, wants to buy a Japanese government bond.
(y) ABC Securities, a U.S. stock brokerage, wants to purchase stock issued by a French corporation.
(z) Tony, a U.S. citizen, wants to hold more currency in case of emergencies.
A. (x), (y) and (z) B. (x) and (y) only
C. (x) and (z) only D. (y) and (z) only
E. (x) only

According to the open-economy macroeconomic model, which of the following statements is (are) correct?
(x) In the open-economy macroeconomic model, if for some reason foreign citizens want to purchase more U.S. goods and services at each exchange rate, then the demand for dollars in the market for foreign-currency exchange shifts right.
(y) If foreign citizens want to buy fewer U.S. bonds, then the demand for U.S. dollars in the market for foreign currency exchange will shift to the right
(z) If the real exchange rate for the dollar is below the equilibrium level, the quantity of dollars supplied in the market for foreign-currency exchange is less than the quantity demanded and the dollar will appreciate.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (x) only

which of the following statements is (are) correct?
(x) A trade policy is a government policy that directly influences the quantity of goods and services that a country imports or exports.
(y) An “import quota”.is a limit on the quantity of a good that can be produced abroad and sold domestically.
(z) A tax on imported goods is called a tariff.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (x) only

Solutions

Expert Solution

In the open economy macroeconomic model, which of the following is included in the supply of U.S. dollars in the market for foreign-currency?

(x) Nebraska Life, a U.S. life insurance company, wants to buy a Japanese government bond.
(y) ABC Securities, a U.S. stock brokerage, wants to purchase stock issued by a French corporation.
(z) Tony, a U.S. citizen, wants to hold more currency in case of emergencies.
A. (x), (y) and (z)

B. (x) and (y) only - this is the right answer. Z represents a domestic transaction
C. (x) and (z) only

D. (y) and (z) only
E. (x) only

According to the open-economy macroeconomic model, which of the following statements is (are) correct?
(x) In the open-economy macroeconomic model, if for some reason foreign citizens want to purchase more U.S. goods and services at each exchange rate, then the demand for dollars in the market for foreign-currency exchange shifts right.
(y) If foreign citizens want to buy fewer U.S. bonds, then the demand for U.S. dollars in the market for foreign currency exchange will shift to the right
(z) If the real exchange rate for the dollar is below the equilibrium level, the quantity of dollars supplied in the market for foreign-currency exchange is less than the quantity demanded and the dollar will appreciate.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only - this is teh right answer. In situation Y, the demand curve will shift leftwards and not rightwards
D. (y) and (z) only
E. (x) only

which of the following statements is (are) correct?
(x) A trade policy is a government policy that directly influences the quantity of goods and services that a country imports or exports.
(y) An “import quota”.is a limit on the quantity of a good that can be produced abroad and sold domestically.
(z) A tax on imported goods is called a tariff.
A. (x), (y) and (z) - all the statements are correct
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (x) only


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