EC_3220_HW_4_ch5

EC_3220_HW_4_ch5 - ECONOMICS 3220 INTERMEDIATE...

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Page 1 ECONOMICS 3220 INTERMEDIATE MACROECONOMICS Homework 4: Ch 5 1. An “open” economy is one in which: A) the level of output is fixed. B) government spending exceeds revenues. C) the national interest rate equals the world interest rate. D) there is trade in goods and services with the rest of the world. 2. A country's exports may be written as equal to: A) GDP minus consumption minus investment minus government spending. B) GDP minus consumption of domestic goods and services minus investment of domestic goods and services minus government purchases of domestic goods and services. C) imports. D) GDP minus imports. 3. Net exports equal GDP minus domestic spending on: A) all goods and services. B) all goods and services plus foreign spending on domestic goods and services. C) domestic goods and services. D) domestic goods and services minus foreign spending on domestic goods and services. 4. If domestic spending exceeds output, we ______ the difference—net exports are ______. A) import; negative B) export; positive C) import; positive D) export; negative 5. The value of net exports is also the value of: A) net investment. B) net saving. C) national saving. D) the excess of national saving over domestic investment.
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Page 2 6. If net capital outflow is positive, then: A) exports must be positive. B) exports must be negative. C) the trade balance must be positive. D) the trade balance must be negative. 7. Net capital outflow is equal to: A) national saving minus the trade balance. B) domestic investment plus the trade balance. C) domestic investment minus national saving. D) national saving minus domestic investment. 8. If domestic saving exceeds domestic investment, then net exports are ______ and net capital outflows are ______. A) positive; positive B) positive; negative C) negative; negative D) negative; positive 9. In a small, open economy, if net exports are negative, then: A) domestic spending is greater than output. B) saving is greater than investment. C) net capital outflows are negative. D) imports are less than exports. 10. If domestic saving is less than domestic investment, then net exports are ______ and net capital outflows are ______. A) positive; positive B) positive; negative C) negative; negative D) negative; positive 11. When exports exceed imports, all of the following are true except : A) net capital outflows are positive. B) net exports are positive. C) domestic investment exceeds domestic saving. D) domestic output exceeds spending.
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Page 3 12. In a small open economy, if exports equal $5 billion and imports equal $7 billion, then there is a trade ______ and ______ net capital outflow. A) deficit; negative B) surplus; negative C) deficit; positive D) surplus; positive 13. In a small open economy, if exports equal $15 billion and imports equal $8 billion, then there is a trade ______ and ______ net capital outflow.
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This note was uploaded on 02/09/2011 for the course ECON 3220 taught by Professor Schultz during the Spring '11 term at UNO.

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EC_3220_HW_4_ch5 - ECONOMICS 3220 INTERMEDIATE...

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