Question 1

The slope of the supply of loanable funds is based on an increase in

Accepted Answer

A

Question 2

In an open economy, national saving equals

Accepted Answer

In an open economy, national saving can be used for domestic investment or for purchasing foreign assets. Therefore, national saving is equal to domestic investment (which uses domestic saving) plus net capital outflow (which represents the portion of domestic saving used to purchase foreign assets).

Question 3

Other things the same, a lower real interest rate decreases the quantity of

Accepted Answer

B

Question 4

In the open-economy macroeconomic model, the supply of loanable funds comes from

Accepted Answer

The answer of In the open-economy macroeconomic model, the supply...

Question 5

The open-economy macroeconomic model takes

Accepted Answer

The answer of The open-economy macroeconomic model takes
...

Question 6

In the open-economy macroeconomic model, the supply of loanable funds comes from

Accepted Answer

The answer of In the open-economy macroeconomic model, the supply...

Question 7

Many U.S. business leaders argue that the current state of U.S. net exports is the result of

Accepted Answer

The answer of Many U.S. business leaders argue that the...

Question 8

The explanation for the slope of

Accepted Answer

According to the theory of supply and demand for loanable funds, the supply of loanable funds curve shows the positive relationship between the real interest rate and the quantity of funds supplied. Higher interest rates incentivize individuals to save more money, which increases the supply of loanable funds. This is because saving is the source of funds available for lending. Therefore, choice A is correct.

Question 9

In the open-economy macroeconomic model, the market for loanable funds equates national saving with

Accepted Answer

The answer of In the open-economy macroeconomic model, the market...

Question 10

In the open-economy macroeconomic model, the market for loanable funds identity can be written as

Accepted Answer

In the open-economy macroeconomic model, saving (S) equals domestic investment (I) plus net capital outflow (NCO). This is because savings can be used for either domestic investment or lending to foreign countries (represented by NCO). Option A is incorrect because it only considers the domestic economy and does not account for the impact of NCO. Option B is incorrect because NCO does not equal savings - it represents the difference between domestic saving and domestic investment. Option D is also incorrect because it does not account for the impact of domestic saving on the market for loanable funds.

Question 11

Other things the same, a higher real interest rate raises the quantity of

Accepted Answer

The answer of Other things the same, a higher real...

Question 12

In the open-economy macroeconomic model, the supply of loanable funds comes from

Accepted Answer

According to the open-economy macroeconomic model, the supply of loanable funds comes from national saving, which includes both private saving and government saving.

Question 13

Over the past three decades, the United States has

Accepted Answer

The statement "persistently had a trade deficit" indicates that the United States has consistently imported more goods and services than it has exported over the past three decades.

Question 14

In the open-economy macroeconomic model, the market for loanable funds equates national saving with

Accepted Answer

The answer of In the open-economy macroeconomic model, the market...

Question 15

Other things the same, people in the U.S. would want to save more if the real interest rate in the U.S.

Accepted Answer

The answer of Other things the same, people in the...

Question 16

The open-economy macroeconomic model includes

Accepted Answer

The open-economy macroeconomic model takes into account the interaction between the market for loanable funds (domestic saving and investment) and the market for foreign-currency exchange (exports, imports, and exchange rates). Therefore, both markets are included in the model. Option A and B are incorrect as they only include one market each or none at all.

Question 17

A country has national saving of $60 billion, government expenditures of $30 billion, domestic investment of $40 billion, and net capital outflow of $20 billion. What is its supply of loanable funds?

Accepted Answer

The supply of loanable funds is equal to national saving plus net capital outflow. Therefore, the supply of loanable funds is $60 billion + (-$20 billion) = $40 billion. The correct answer is B, which is the closest value to $40 billion.

Question 18

Other things the same, an increase in the U.S. interest rate causes the quantity of loanable funds supplied to

Accepted Answer

The answer of Other things the same, an increase in...

Question 19

A country has national saving of $70 billion, government expenditures of $20 billion, domestic investment of $30 billion, and net capital outflow of $40 billion. What is its supply of loanable funds?

Accepted Answer

The supply of loanable funds is equal to national saving minus government expenditures, which is $70 billion - $20 billion = $50 billion. However, since we are also given that there is a net capital outflow of $40 billion, this means that $40 billion of these funds are being invested in foreign countries rather than domestically. Therefore, the total supply of loanable funds is $70 billion.

Question 20

The open-economy macroeconomic model examines the determination of

Accepted Answer

The open-economy macroeconomic model examines the determination of the trade balance and the exchange rate through the interaction of domestic and foreign demand for goods and services, as well as the flows of capital between countries. The model also takes into account the effects of domestic and foreign prices on the trade balance and exchange rate. The model does not directly examine output growth rate, real interest rate, unemployment, or inflation rate, although these variables may be indirectly affected by changes in the trade balance and exchange rate.

Quiz 14: A Macroeconomic Theory of the Open Economy

The slope of the supply of loanable funds is based on an increase in

In an open economy, national saving equals

Other things the same, a lower real interest rate decreases the quantity of

In the open-economy macroeconomic model, the supply of loanable funds comes from

The open-economy macroeconomic model takes

In the open-economy macroeconomic model, the supply of loanable funds comes from

Many U.S. business leaders argue that the current state of U.S. net exports is the result of

The explanation for the slope of

In the open-economy macroeconomic model, the market for loanable funds equates national saving with

In the open-economy macroeconomic model, the market for loanable funds identity can be written as

Other things the same, a higher real interest rate raises the quantity of

In the open-economy macroeconomic model, the supply of loanable funds comes from

Over the past three decades, the United States has

In the open-economy macroeconomic model, the market for loanable funds equates national saving with

Other things the same, people in the U.S. would want to save more if the real interest rate in the U.S.

The open-economy macroeconomic model includes

A country has national saving of $60 billion, government expenditures of $30 billion, domestic investment of $40 billion, and net capital outflow of $20 billion. What is its supply of loanable funds?

Other things the same, an increase in the U.S. interest rate causes the quantity of loanable funds supplied to

A country has national saving of $70 billion, government expenditures of $20 billion, domestic investment of $30 billion, and net capital outflow of $40 billion. What is its supply of loanable funds?

The open-economy macroeconomic model examines the determination of