Export of financial assets means domestic agents
Question # 00523377
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Updated on: 05/07/2017 12:55 AM Due on: 05/07/2017
1. Export of financial assets means domestic agents
. a) save by buying foreign assets . b) borrow by selling assets to foreigners . c) decrease spending on home goods . d) increase spending on foreign goods 2. A country has most of its external liabilities in own currency and most of its external assets in foreign currency. Suppose the country experiences an exchange rate appreciation against a basket of major currencies. What would happen to the external wealth of this country?
a) rises b) stays the same c) falls d) cannot tell
3. When the real exchange rate appreciates in the U.S, then there is a(n)
_________ in the demand for U.S. goods and _____________ in U.S. demand for foreign goods.
a) increase; increase b) decrease; decrease c) increase; decrease d) decrease; increase
4. If the trade surplus of a country declines, it could be because a) the real exchange rate increasedb) domestic income fellc) foreign income fell
a) the real exchange rate increased
b) domestic income fell
c) foreign income fell
d) foreign price level increased
5. If equilibrium output (income) increases in a country, it could be because
a) a decline in foreign country income b) an increase in government spending
c) a rise in the interest rate
d) a hike in income taxes
6. When a country with floating exchange rates uses expansionary fiscal and monetary policy simultaneously to fight a recession,
a) output and interest rate would unambiguously increase.
b) interest rate would increase, but the impact on output would be ambiguous. c) output would increase and interest rate would decline.
d) output would increase, but the impact on interest rate would be ambiguous.
7. All else equal, when the government implements expansionary policy crowding out occurs because
a) net exports increase b) interest rate declines
c) exchange rate appreciates d) foreign income declines
8. When the demand for exports of a country declines exogenously, then a) IS will shift to the right b) IS will shift to the left
c) LM will shift to the right d) LM will shift to the left Consumption 400 Government spending
Gross national expenditure 80
630 National saving Capital gains on external wealth
Capital gains on domestic capital stock
Domestic assets exported to foreigners 11 6
200 315 Foreign assets imported by domestic
agents
355 Net unilateral transfers 5
. a) save by buying foreign assets . b) borrow by selling assets to foreigners . c) decrease spending on home goods . d) increase spending on foreign goods 2. A country has most of its external liabilities in own currency and most of its external assets in foreign currency. Suppose the country experiences an exchange rate appreciation against a basket of major currencies. What would happen to the external wealth of this country?
a) rises b) stays the same c) falls d) cannot tell
3. When the real exchange rate appreciates in the U.S, then there is a(n)
_________ in the demand for U.S. goods and _____________ in U.S. demand for foreign goods.
a) increase; increase b) decrease; decrease c) increase; decrease d) decrease; increase
4. If the trade surplus of a country declines, it could be because a) the real exchange rate increasedb) domestic income fellc) foreign income fell
a) the real exchange rate increased
b) domestic income fell
c) foreign income fell
d) foreign price level increased
5. If equilibrium output (income) increases in a country, it could be because
a) a decline in foreign country income b) an increase in government spending
c) a rise in the interest rate
d) a hike in income taxes
6. When a country with floating exchange rates uses expansionary fiscal and monetary policy simultaneously to fight a recession,
a) output and interest rate would unambiguously increase.
b) interest rate would increase, but the impact on output would be ambiguous. c) output would increase and interest rate would decline.
d) output would increase, but the impact on interest rate would be ambiguous.
7. All else equal, when the government implements expansionary policy crowding out occurs because
a) net exports increase b) interest rate declines
c) exchange rate appreciates d) foreign income declines
8. When the demand for exports of a country declines exogenously, then a) IS will shift to the right b) IS will shift to the left
c) LM will shift to the right d) LM will shift to the left Consumption 400 Government spending
Gross national expenditure 80
630 National saving Capital gains on external wealth
Capital gains on domestic capital stock
Domestic assets exported to foreigners 11 6
200 315 Foreign assets imported by domestic
agents
355 Net unilateral transfers 5
9) Wealth of a Nation
The above table represents annual data for Catsa during 2015. The values are in millions of dollars. Answer the following questions accordingly.
A) What is the change in domestic wealth Catsa experienced during 2015? B) What is the current account balance of Catsa at the end of 2015? C) What is the financial account balance of Catsa at the end of 2015? D) What is the change in external wealth Catsa experienced during 2015? E) What is the capital account balance of Catsa at the end of 2015?
The above table represents annual data for Catsa during 2015. The values are in millions of dollars. Answer the following questions accordingly.
A) What is the change in domestic wealth Catsa experienced during 2015? B) What is the current account balance of Catsa at the end of 2015? C) What is the financial account balance of Catsa at the end of 2015? D) What is the change in external wealth Catsa experienced during 2015? E) What is the capital account balance of Catsa at the end of 2015?
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Solution: Export of financial assets means domestic agents