Macroland is a small open economy with perfect capital mobility and a flexible exchange- rate system. Macroland is initially in equilibrium at the natural level of output with balanced trade. Compare the impact of a tax cut in the short run (when prices are fixed) and in the long run (when prices are flexible) on: a) output, b) consumption, c) investment, d) net exports, and e) the exchange rate.

In 2002, the United States placed higher tariffs on imports of steel. According to the open-economy macroeconomic model this policy reduced imports   A.  of steel into the United States and increased U.S. exports of other goods by an equal amount. B.  into the United States and made the net supply of dollars in the foreign exchange market shift right. C.  of steel into the United States, but reduced U.S. exports of other goods by an equal amount. D.  into the United States and made U.S. net exports rise.

This is all one question, please answer everything! Explain how each of the below affect Sweden's balance of payments. Please choose the correct answer between the options presented: Oil exports to the rest of the world decreased due to stay at home orders: current account moves toward (surplus/current) account moves toward (deficit/capital) (financial) account moves toward (surplus/capital) (financial) account moves toward deficit Due to Brexit, Sweden imports of British goods decreases: current account moves toward (surplus/current) account moves toward (deficit/capital) (financial) account moves toward (surplus/capital) (financial) account moves toward deficit Swedish laborers working outside of Europe see a decrease in their incomes, and thus there is a decrease in remittances: current account moves toward (surplus/current) account moves toward (deficit/capital) (financial) account moves toward (surplus/capital) (financial) account moves toward deficit Fewer Swedans travel outside…

In an open economy, an increase in the tax rate will: have a larger effect on output if the exchange rate is fixed than if the exchange rate is flexible have the same effect on output if the exchange rate is flexible or fixed have a larger effect on output if the exchange rate is flexible than if the exchange rate is fixed have no effect on output if the exchange rate is flexible have no effect on output if the exchange rate if fixed

Graphically, when is the balance of trade equal to zero? Multiple Choice   When the rising IM line intersects the horizontal X line.   When the rising X line intersects the horizontal IM line.   When the rising IM line intersects the horizontal axis.   When the rising X line intersects the horizontal axis.

Week 6: Question Number 6.2. You are an IMF official going to a country whose export earnings are not able to pay for imports. The government has requested a loan from the IMF. Which areas would you recommend the government to cut: (1) education, (2) salaries for officials, (3) food subsidies, and/or (4) tax rebates for exporters?

Consider the following model of an economy with no international trade, and in which the price level is fixed:                                                                                           C = 40 + (8/9)∙DI                                                                                                    I = 30                                                                                                   G = 30                                                                                        Taxes = (1/8)∙GDP   where C is consumption demand, DI is disposable income, I is planned investment, G is government purchases, and all whole numbers are in billions of dollars.   Determine the equilibrium level of production (GDP) in this economy (show your work), and draw this equilibrium situation on a graph.   Use the multiplier to determine the change in equilibrium GDP that would result from an exogenous 16 billion dollar increase of government purchases. Then determine…

Show the effects of expansionary policy on output and the price level in an open economy when there is full employment.

Who would benefit if the exchange rate with yen (in U.S. dollars) increased (i.e. one dollar can buy more yens)?  U.S. exporters.   U.S. consumers and Japanese exporters.   Japanese exporters.   Japanese tourists.   U.S. consumers.

A trade deficit occurs when a country: A) Has higher exports than imports B) Has higher imports than exports C) Implements strict import quotas D) Lowers tariffs on all imports