HW 6.1

Question 1

If the number of dollars per yen rises, this is called a(n):

Answer 1

appreciation of the yen.

Question 2

As the U.S. budget deficit shrank in the 1990s, the increase in U.S. national saving was ______ than the expansionary shift in the U.S. investment function, resulting in a trade ______.

Answer 2

weaker; deficit

Question 3

Net capital outflow is equal to:

Answer 3

national saving minus domestic investment.???????

Question 4

Net exports equal GDP minus domestic spending on:

Answer 4

all goods and services

Question 5

The value of net exports is also the value of:

Answer 5

the excess of national saving over domestic investment.

Question 6

When exports exceed imports, all of the following are true except:

Answer 6

domestic investment exceeds domestic saving.

Question 7

If domestic spending exceeds output, we ______ the difference—net exports are ______.

Answer 7

import; negative

Question 8

A trade deficit can be financed in all of the following ways except by:

Answer 8

borrowing from domestic lenders.

Question 9

If a U.S. corporation sells a product in Europe and uses the proceeds to purchase shares in a European corporation, then U.S. net exports ______ and net capital outflows ______.

Answer 9

Increase, Increase

Question 10

If a U.S. corporation purchases a product made in Europe and the European producer uses the proceeds to purchase a U.S. government bond, then U.S. net exports ______ and net capital outflows ______.

Answer 10

Decrease, Decrease

Question 11

The nominal exchange rate between the U.S. dollar and the Japanese yen is the:

Answer 11

number of yen you can get for one dollar.