VĨ MÔ CHUYÊN SÂU

In the small open economy model, the trade balance is determined by the difference between saving and investment at the country’s interest rate. This statement is true or false?

• TRUE

• FALSE

Answer explanation

THE TRUE STATEMENT IS

In the small open economy model, the trade balance is determined by the difference between saving and investment at the WORLD interest rate

Which of the following factors determines the loanable funds market?

• Real interest rate

• Norminal Interest rate

• Real exchange rate

• Norminal exchange rate

The supply and demand for the loanable funds market in a small open economy come from:

• National saving & investment

• Private saving & consumption

• Public saving & investment

• National saving & government spending

In the supply of loanable funds, national saving does not depend on the …..?

• income

• interest rate

• investment

• international saving

Regarding the loanable funds market in a small open economy, a grant of investment tax credits results in a/an …….in investment level and a/an ............ in net exports

• increases; increase

• decreases; increase

• decreases; decrease

• increases; decrease

Which of the following statements for the foreign exchange market in a small open economy is true?

• The demand is NX, which positively depends on the real exchange rate

• The demand is S-I, which does not depends on the real exchange rate

• The supply is NX, which negatively depends on the real exchange rate

• The supply represented by S-I does not depends on the real exchange rate

Regarding the foreign exchange market in a small open economy, how does the expansionary fiscal policy at home (tax decreases) affect the real exchange rate and the net exports?

• Both increase

• Both decrease

• Real exchange rate increases & net exports decrease

• Real exchange rate decreases & net exports increase.

What is the equation of the net export for the foreign exchange market in a small open economy ?

• NX(ε) = S −I(r*)

• NX(ε) = S − I

• NX(ε) = I(r*) − S

• NX(ε) = S + I(r*)

The real exchange rate is determined at the equilibrium of the foreign exchange market. This statement is true or false ?

• TRUE

• FALSE

Regarding the foreign exchange market in a small open economy, what will happen to net export and real exchange rate if the government imposes tariffs on imported goods?

• Both remain unchanged

• NX increase, real exchange rate decrease

• Both decrease

• NX remains unchanged, real exchange rate increases