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9) Which of the following changes would cause American net exports to decrease?A) A decrease in the real value of the dollarB) A decrease in American incomeC) An increase in foreign incomeD) A shift in demand by American consumers away from domestically produced goodsAnswer: DDiff: 1Topic: Section: 13.2Question Status: Previous Edition
10) A decline in the exchange rate could have been caused by which of these factors?11) The U.S. real interest rate rises relative to the British real interest rate. Britishnet exports ________ and the Britishexchange rate ________.12) The Japanese real interest rate declines relative to the German real interest rate. Germannet exports ________ and the Germanexchange rate ________.13.3 The IS-LM Model for an Open Economy1) Goods market equilibrium in the open economy occurs whenA) desired saving equals desired investment.B) output equals desired consumption plus desired investment plus government spending.C) desired consumption equals desired investment.D) desired saving minus desired investment equals net exports.Answer: DDiff: 1Topic: Section: 13.3
2) In an open economy, a decrease in net exports because of reduced demand for domestic products by foreigners should cause the domestic real interest rate to ________ and should causedesired saving minus desired investment to ________.3) A decrease in foreign output would cause the domestic country's net exports to ________ and cause the domestic country's IScurve to ________.4) An increase in foreign output would cause the domestic country's net exports to ________ andcause the domestic country's IScurve to ________.5) A decrease in the foreign real interest rate would cause the domestic country's net exports to ________ and cause the domestic country's IScurve to ________.A) rise; shift upB) rise; shift downC) fall; shift upD) fall; shift downAnswer: DDiff: 2Topic: Section: 13.3