Question

3.         Which statement is consistent with negative net exports?

a.         Net capital outflow is positive, so foreign assets bought by Canadians are greater than Canadian assets bought by foreigners.

b.         Net capital outflow is positive, so Canadian assets bought by foreigners are greater than foreign assets bought by Canadians.

c.          Net capital outflow is negative, so foreign assets bought by Canadians are greater than Canadian assets bought by foreigners.

d.         Net capital outflow is negative, so Canadian assets bought by foreigners are greater than foreign assets bought by Canadians.

4.         Where does the supply of dollars in the foreign-currency exchange market come from?

            a.         from Canadian national saving

            b.         from Canadian net capital outflow

            c.          from domestic investment

            d.         from foreign demand for Canadian goods

5.         In the market for foreign-currency exchange in the open-economy macroeconomic model, what does the amount of net capital outflow represent?

            a.         the quantity of dollars supplied for the purpose of selling assets domestically

            b.         the quantity of dollars supplied for the purpose of buying assets abroad

            c.          the quantity of dollars demanded for the purpose of buying Canadian exports of goods and services

d.         the quantity of dollars demanded for the purpose of importing foreign goods and services

6.         What are the implications of a depreciation of the dollar?

            a.         The dollar buys more foreign currency, so it buys more foreign goods.

            b.         The dollar buys more foreign currency, so it buys fewer foreign goods.

            c.          The dollar buys less foreign currency, so it buys more foreign goods.

            d.         The dollar buys less foreign currency, so it buys fewer foreign goods.

Answer 1