open economy

Why we exchange internationnaly?

• because it's cost less sometimes to buy in another country

• Because we need to discover the culture

• Strategy for GDP (export and import)

• None of above

• A and C

What is an open economy?

• An economy that has interactions only in trade with other countries with Exchange of culture is also.

• An economy that has interactions in trade or finance with other countries.

• Development of trade in the world of necessity good and services

What is absolute advantage?

• It is an advantage given by other countries to develop internationally. The country has more possibilities to sell its product and therefore to be competitive

• if a country specialises in the production for which its productivity is the highest (or lowest) compared to its partners, it increases its national wealth.

• A country has an absolute advantage in the production of a good if it can produce that good at a lower cost than another country

• It is the ability to compete with other countries to develop internationally. The country has more possibilities to sell its product and therefore to be competitive.

A real appreciation of the national currency should normally:

• Improve the country's price competitiveness and cause a deterioration in its current account balance

• Deteriorate the country's price competitiveness and cause a deterioration in its current account balance

• Improve the country's price competitiveness and cause a improvement in its current account balance

• deteriorate the country's price competitiveness and cause a improvement in its current account balance

Which of the following cases, all things being equal , can lead to a real appreciation of the national currency?

• a nominal appreciation of the currency

• a decrease in the general level of domestic prices

• an increase in the general level of foreign prices

• all these answers are correct

the current account balance:

• Is always larger than the trade balance

• Is always smaller than the trade balance

• Is equal to the trade balance trade

• Can be different from trade balance

What is nominal exchange rate ?

Why a country can use the dollar at the place of is currency?

• Because dollar is a International currency and it's easier to use it.

• Because the country haven't the choice, united states control some country and them currency

• because the dollar can create link with United States

• because the current currency is unstable or does not have much value

Which answer is not a factors that influence the exchange rate ? Example of demand for euro

• US companies wishing to invest in the EU

• Agent importing US goods into EU

• US citizens travelling in the EU

• Holders of dollars wanting to buy EU stocks or bonds

What is the real rate of exchange ?

• The rate at which a person can sell a stocks of one company to another

• The rate at which a person can trade the G and S of one country for the G and S of another.

• Th rate nominal divided by the real rate that indicated at who much we can trade a G and S to another country.

• The rate at which a country can see his curency be depreciate or appreciate that means it can create inflation.