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In the open-economy macroeconomic model,a higher domestic interest rate reduces the quantity of loanable funds demanded

A) True
B) False

Correct Answer

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If policymakers impose import restrictions on clothing,the U.S.trade deficit will shrink.

A) True
B) False

Correct Answer

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According to the open-economy macroeconomic model,if the United States moved from a government budget deficit to a government budget surplus,U.S.real interest rates would increase and the real exchange rate of the U.S.dollar would appreciate.

A) True
B) False

Correct Answer

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The key determinant of net capital outflow is the real interest rate.

A) True
B) False

Correct Answer

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An increase in a country's real interest rate reduces that country's net capital outflow.

A) True
B) False

Correct Answer

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In the open-economy macroeconomic model,if there is currently a surplus in the foreign exchange market,the quantity of desired net exports will increase as the market moves to equilibrium.

A) True
B) False

Correct Answer

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In the open-economy macroeconomic model,net capital outflow links the markets for loanable funds and foreign-currency exchange.

A) True
B) False

Correct Answer

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As the interest rate rises,it is possible that net capital outflow could move from a positive to a negative value.

A) True
B) False

Correct Answer

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An increase in the government budget deficit shifts the demand for loanable funds to the right.

A) True
B) False

Correct Answer

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Capital flight raises a country's interest rate.

A) True
B) False

Correct Answer

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

A) True
B) False

Correct Answer

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In the open-economy macroeconomic model,the real exchange rate does not affect net capital outflow.

A) True
B) False

Correct Answer

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Other things the same,a higher real exchange rate raises net exports.

A) True
B) False

Correct Answer

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In the open-economy macroeconomic model,other things the same,an increase in the exchange rate raises the quantity of dollars supplied in the market for foreign-currency exchange.

A) True
B) False

Correct Answer

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In an open economy,the supply of loanable funds comes from national saving.

A) True
B) False

Correct Answer

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The purchase of a capital asset adds to the demand for loanable funds only if that asset is a domestic one.

A) True
B) False

Correct Answer

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