Unit 32: A Macroeconomic Theory of The Open Economy: A) Domestic Investment and The Net Capital Outflow

UNIT 32: A MACROECONOMIC THEORY OF THE OPEN ECONOMY
Câu Hỏi 1
Holding other things constant, an increase in a nation’s interest rate reduces
Select one:
a) domestic investment and the net capital outflow.
b) national saving and the net capital outflow.
c) national saving only.
d) national saving and domestic investment.
Câu Hỏi 2
Holding other things constant, an appreciation of a nation’s currency causes
Select one:
a) exports to fall and imports to rise.
b) both exports and imports to fall.
c) both exports and imports to rise.
d) exports to rise and imports to fall.
Câu Hỏi 3
The government in an open economy cuts spending to reduce the budget deficit. As a result,
the interest rate ………………, leading to a capital ……………… and a real exchange rate
……………….
Select one:
a) falls, outflow, appreciation
b) rises, inflow, appreciation
c) falls, outflow, depreciation
d) falls, inflow, appreciation
Câu Hỏi 4
Because the open-economy macroeconomic model focuses on the long run, it is assumed that
Select one:
a) the price level, but not GDP is given.
b) both the price level and GDP are given.
c) GDP, but not the price level is given.
d) the price level and GDP are variables to be determined by the model.
Câu Hỏi 5
The open-economy macroeconomic model examines the determination of
Select one:
a) the trade balance and the exchange rate.
b) the output growth rate and the inflation rate.
c) the output growth rate and the real interest rate.
d) unemployment and the exchange rate.
Câu Hỏi 6
The open-economy macroeconomic model includes
Select one:
a) only the market for loanable funds.
b) only the market for foreign-currency exchange.
c) both the market for loanable funds and the market for foreign-currency exchange.
d) neither the market for loanable funds nor the market for foreign-currency exchange.
Câu Hỏi 7
In the open-economy macroeconomic model, the supply of loanable funds equals
Select one:
a) national saving. The demand for loanable funds comes only from domestic investment.
b) private saving. The demand for loanable funds comes only from domestic investment.
c) private saving. The demand for loanable funds comes from domestic investment + net
capital outflow.
d) national saving. The demand for loanable funds comes from domestic investment
+ net capital outflow.
Câu Hỏi 8
If interest rates rise in the Vietnam, then other things the same
Select one:
a) foreigners would buy fewer Vietnamese bonds which increases the quantity of loanable
funds demanded in Vietnam.
b) foreigners would buy fewer Vietnamese bonds which reduces the quantity of loanable
c) foreigners would buy more Vietnamese bonds which reduces the quantity of
loanable funds demanded in Vietnam.
d) foreigners would buy more Vietnamese bonds which increases the quantity of loanable
Câu Hỏi 9
An increase in real interest rates in Vietnam
Select one:
a) discourages both Vietnamese and foreign residents from buying Vietnamese assets.
b) encourages foreign residents to buy Vietnamese assets, but discourages
Vietnamese residents from buying Vietnamese assets.
c) encourages Vietnamese residents to buy Vietnamese assets, but discourages foreign
residents from buying Vietnamese assets.
d) encourages both Vietnamese and foreign residents to buy Vietnamese assets.
Câu Hỏi 10
Which of the following is the most likely response to a decrease in the Vietnamese real interest
rate?
Select one:
a) a Vietnamese company decides to expand its factory
b) a Vietnamese citizen decides to purchase fewer foreign bonds
c) a Singaporean mutual fund decides to increase its deposits at a Vietnamese bank
d) All of the above are consistent.
Câu Hỏi 11
Other things the same, if the real interest rate in a country falls, domestic residents will desire to
purchase
Select one:
a) fewer capital goods and fewer foreign bonds.
b) more capital goods and more foreign bonds.
c) more foreign bonds but fewer capital goods.
d) more capital goods but fewer foreign bonds.
Câu Hỏi 12
The value of net exports equals the value of
Select one:
a) national saving.
b) public saving.
c) national saving - net capital outflow.
d) national saving - domestic investment.
Câu Hỏi 13
In the open-economy macroeconomic model, the supply of dollars in the market for foreign-
currency exchange comes from
Select one:
a) net exports
b) net exports - net capital outflow
c) net exports + net capital outflow
d) net capital outflow
Câu Hỏi 14
Other things the same, if the Vietnam’s real exchange rate depreciated, then Vietnam’s net
exports would
Select one:
a) rise and the quantity of dollars demanded in the market for foreign-currency
exchange would rise.
b) fall and the quantity of dollars demanded in the market for foreign-currency exchange
would fall.
c) fall and the quantity of dollars demanded in the market for foreign-currency exchange
would rise.
d) rise and the quantity of dollars demanded in the market for foreign-currency exchange
would fall.
Câu Hỏi 15
In the open-economy macroeconomic model, net capital outflow rises if
Select one:
a) the real interest rate rises. Net capital outflow does not depend on the exchange rate.
b) the real interest rate falls. Net capital outflow does not depend on the exchange
rate.
c) either the exchange rate falls or the real interest rate rises.
d) either the exchange rate rises or the real interest rate falls.
Câu Hỏi 16
If Vietnam’s real interest rate rises, then its
Select one:
a) net capital outflow falls and its net exports rise.
b) net capital outflow and net exports fall.
c) net capital outflow rises and its net exports fall.
d) net capital outflow and net exports rise.
Câu Hỏi 17
If a country raises its budget deficit, then its
Select one:
a) net capital outflow and net exports fall.
b) net capital outflow and net exports rise.
c) net capital outflow rises and net exports fall.
d) net capital outflow falls and net exports rise.
Câu Hỏi 18
An increase in the budget deficit
Select one:
a) raises net capital outflow and domestic investment
b) reduces net capital outflow and domestic investment.
c) raises net capital outflow and reduces domestic investment.
d) reduces net capital outflow and raises domestic investment.
Câu Hỏi 19
If the Vietnamese government raised its budget deficit, then the VND would
Select one:
a) depreciate and Vietnamese net exports would rise.
b) appreciate and Vietnamese net exports would fall.
c) appreciate and Vietnamese net exports would rise.
d) depreciate and Vietnamese net exports would fall.
Câu Hỏi 20
How many more lessons are needed in order to complete the course?
Select one:
a) 2
b) 3
c) 4
d) Any of the above is correct.

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