Question

In the market for foreign currency exchange, the amount of U.S. net capital outflow desired at each real interest rate represents the quantity of U.S. dollars supplied for the purpose of buying foreign assets.

Select one:

True

False

Tony, a U.S. citizen, wants to use his U.S currency to purchase bonds from a German corporation. As a result, Tony is a supplier of U.S. dollars in the foreign currency exchange market.

Select one:

True

False

Question text

Suppose the imposition of a trade policy did not alter the interest rate or level of NCO. If an import quota was imposed, then the demand curve for the domestic currency would shift to the right and the real exchange rate would increase.

Select one:

True

False

Question text

When Mexico suffered from capital flight in 1994, Mexico's real interest rate fell and the Mexican peso appreciated.

Select one:

True

False

Question text

In the open-economy macroeconomic model, the market for loanable funds equates national saving with the sum of net capital outflow and net exports.

Select one:

True

False

Answer 1