Suppose the US is running a trade deficit. According to our simplified model of exchange rate determination and balance of payments, we must have had a situation of Group of answer choices A) a currency that is appreciating. B) the US importing less than it is exporting. C) none of the other options. D) GB is investing (financial investment, in this context) more in the US than the US is investing in GB. E) the US is investing (financial investment, in this context) more in Great Britain (GB) than they invested in the US.

When a country hosts the Olympics this can be expected to        A) reduce the supply of the country's currency on the foreign exchange markets. B) increase the country's exports. C) reduce the country's imports. D) lead to a depreciation of the host country's currency. E) do all of the above.

Explain how exchange rates may impact the performance of international equity investment.

Which of the following is not included in the current account?a. exports of goodsb. imports of goodsc. U.S. capital inflow and outflowd. unilateral transfers

If our (U.S.) current account is in deficit     we are buying foreign financial assets   we must have a government budget deficit   we are supplying foreigners with our savings   we are borrowing from foreigners

Typed

A US imposition of quotas on Milk and milk products is expected to: have no impact on US current account balance as quotas are temporary. reduce the USA's negative current account balance, if other governments do not retaliate. increase USA's current account balance, if other governments do not retaliate. increase the volume of US trade with other countries.

Consider a small open economy with perfect capital mobility and a flexible exchange rate. Suppose that net capital outflow (NCO) is negative at the world interest rate. Use a two-panel diagram to explain the following a) What is the is the effect of an increase in world interest rate on (i) national saving, (ii) domestic investment, (iii) NCO, (iv) the real exchange rate, and (v) net exports? b) What is the is the effect of an increase in the government budget surplus on (i) national saving, (ii) domestic investment, (iii) NCO, (iv) the real exchange rate, and (v) net exports? c) What is the is the effect of an increase in the government budget deficit on (i) national saving, (ii) domestic investment, (iii) NCO, (iv) the real exchange rate, and (v) net exports? d) What is the is the effect of imposing an import quota on (į) national saving, (ii) domestic investment, (iii) NCO, (iv) the real exchange rate, and (v) net exports?

True or False: A sudden appreciation in the exchange rate of a country deteriorates the terms of trade of the country.

A trade balance can be quickly defined as the gap between ___________ , which are also included in the current account balance along with ___________ . a) supply and demand; stocks and bonds b) exports and imports; stocks and bonds c) exports and imports; investment income and unilateral transfers d) supply and demand; investment income and unilateral transfers