UNIT 31: OPEN-ECONOMY MACROECONOMICS

Câu Hỏi 1
If a nation’s currency doubles in value on foreign exchange markets, the currency is said
to ................, reflecting a change in the .................. exchange rate.
Select one:
a) appreciate, nominal
b) appreciate, real
c) depreciate, nominal
d) depreciate, real
Câu Hỏi 2
If a cup of Starbucks coffee costs 50,000 VND in Saigon and 2 USD in New York and
purchasing-power parity holds, what is the nominal exchange rate?
Select one:
a) 1/25,000 VND per USD
b) 50,000 VND per USD
c) 25,000 VND per USD
d) None of the above are correct.
Câu Hỏi 3
The theory of purchasing-power parity says that higher inflation in a nation causes the nation’s
currency to ……………, leaving the ……………… exchange rate unchanged.
Select one:
a) depreciate, nominal
b) depreciate, real
c) appreciate, nominal
d) appreciate, real
Câu Hỏi 4
If a country had a trade deficit of $10 billion and then its exports rose by $20 billion and its
imports rose by $10 billion, its net exports would now be
Select one:
a) -$10 billion.
b) -$20 billion.
c) $10 billion.
d) $0
Câu Hỏi 5
If domestic residents of other countries purchase $40 billion of Vietnam assets and Vietnam
residents purchase $5 billion of foreign assets, then Vietnam net capital outflow is
Select one:
a) -$35 billion and Vietnam has a trade deficit.
b) -$35 billion and Vietnam has a trade surplus.
c) $35 billion and Vietnam has a trade deficit.
d) $35 billion and Vietnam has a trade surplus.
Câu Hỏi 6
Suppose that more British decide to vacation in Vietnam and that the British purchase more
Vietnam Treasury bonds. Ignoring how payments are made for these purchases,
Select one:
a) the first action by itself raises Vietnam’s net exports, the second action by itself raises
Vietnam’s net capital outflow.
b) the first action by itself raises Vietnam’s net exports, the second action by itself
lowers Vietnam’s net capital outflow.
c) the first action by itself lowers Vietnam’s net exports, the second action by itself raises
Vietnam’s net capital outflow.
d) the first action by itself lowers Vietnam’s net exports, the second action by itself lowers
Vietnam’s net capital outflow.
Câu Hỏi 7
Suppose that real interest rates in Vietnam rise relative to real interest rates in other countries.
This increase would make foreigners
Select one:
a) more willing to purchase Vietnam bonds, so Vietnam net capital outflow would
fall.
b) more willing to purchase Vietnam bonds, so Vietnam net capital outflow would rise.
c) less willing to purchase Vietnam bonds, so Vietnam net capital outflow would fall.
d) less willing to purchase Vietnam bonds, so Vietnam net capital outflow would rise.
Câu Hỏi 8
Suppose that Vietnam citizens purchase more cars made in Japan, and Japanese purchase
more bonds issued by Vietnam corporations. Other things the same, these actions
Select one:
a) raise both Vietnam net exports and Vietnam net capital outflows.
b) raise Vietnam net exports and lower Vietnam net capital outflows.
c) lower both Vietnam net exports and Vietnam net capital outflows.
d) lower Vietnam net exports and raise Vietnam net capital outflows.
Câu Hỏi 9
Which of the following equations is always correct in an open economy?
Select one:
 a) NX = Y - C - G - I
b) NX = S - I
c) NX = NCO
d) All of the above are correct.
Câu Hỏi 10
If saving is less than domestic investment, then
Select one:
a) there is a trade deficit and Y < C + I + G.
b) there is a trade surplus and Y > C + I + G.
c) there is a trade surplus and Y < C + I + G.
d) there is a trade deficit and Y > C + I + G.
Câu Hỏi 11
If a country has a trade deficit
Select one:
a) it has positive net exports and negative net capital outflow.
b) it has positive net exports and positive net capital outflow.
c) it has negative net exports and negative net capital outflow.
d) it has negative net exports and positive net capital outflow.
Câu Hỏi 12
If a country has negative net capital outflows, then its net exports are
Select one:
a) negative and its saving is larger than its domestic investment.
b) positive and its saving is smaller than its domestic investment.
c) positive and its saving is larger than its domestic investment.
d) negative and its saving is smaller than its domestic investment.
Câu Hỏi 13
If a Vietnam government reduced corruption and reformed its tax system so that businesses
found operating here less risky, it’s likely that Vietnam’s
Select one:
a) net exports would increase and its net capital outflows would decrease.
b) net exports would decrease and its net capital outflow would increase.
c) net exports and net capital outflows would increase.
d) net exports and net capital outflow would decrease.
Câu Hỏi 14
Other things the same, if a country has a trade deficit and saving rises,
Select one:
 a) net capital outflow falls, so the trade deficit increases.
b) net capital outflow rises, so the trade deficit decreases.
c) net capital outflow falls, so the trade deficit decreases.
d) net capital outflow rises, so the trade deficit increases.
Câu Hỏi 15
If a county has 25 billion euros of imports, 15 billion euros of exports, and sells 20 billion euros
of assets to foreigners, how many foreign assets do domestic residents purchase?
Select one:
a) 5 billion euros
b) 10 billion euros
c) 30 billion euros
d) None of the above are correct.
Câu Hỏi 16
If citizens of a country are not saving much, it is better to
Select one:
a) have foreigners invest in the domestic economy than no one at all.
b) reduce investment.
c) force citizens to save.
d) to prevent opportunities for citizens to buy capital assets abroad.
Câu Hỏi 17
The VND is said to depreciate against the USD if
Select one:
a) the exchange rate rises. Other things the same, it will cost fewer USD to buy Vietnam
goods.
b) the exchange rate rises. Other things the same, it will cost more USD to buy Vietnam
goods.
c) the exchange rate falls. Other things the same, it will cost more USD to buy Vietnam
goods.
d) the exchange rate falls. Other things the same, it will cost fewer USD to buy
Vietnam goods.
Câu Hỏi 18
If a US dollar currently exchanges at a rate of 23,000 VND and someone forecasts that in a year
it will exchanges at a rate of 23,500 VND, then the forecast is given in
Select one:
a) real terms and implies the US dollar will depreciate.
b) nominal terms and implies the US dollar will depreciate.
c) nominal terms and implies the US dollar will appreciate.
d) real terms and implies the US dollar will appreciate.
Câu Hỏi 19
If the exchange rate is 1.25 New Zealand dollars per U.S. dollar, the price of apples is $2 a
pound in the U.S. and 1 New Zealand dollar per pound in New Zealand, what is the real
exchange rate?
Select one:
a) .75
b) 2
c) 2.50
d) 1.25
Câu Hỏi 20
Suppose that the real exchange rate between Vietnam and the United States is defined in terms
of baskets of goods. Other things the same, which of the following will increase the real
exchange rate (that is, increase the number of baskets of Vietnamese goods that is needed in
order to buy a basket of U.S. goods)?
Select one:
a) an increase in the quantity of VND needed in order to buy USD
b) a decrease in the price of U.S. goods
c) an increase in the price in VND of Vietnamese goods
d) All of the above are correct.
Câu Hỏi 21
Consider an identical basket of goods in both the Vietnam and the U.S. For a given nominal
exchange rate, in which case is it certain that the Vietnam’s real exchange rate with the U.S.
falls?
Select one:
a) the price of the basket of goods rises in Vietnam and falls in the U.S.
b) the price of the basket of goods falls in the U.S. and rises in Vietnam.
c) the price of the basket of goods rises in the U.S. and Vietnam.
d) the price of the basket of goods falls in both the U.S. and Vietnam.
e) the price of the basket of goods falls in Vietnam and rises in the U.S
Câu Hỏi 22
If the Vietnam’s real exchange rate appreciates, Vietnam exports
Select one:
a) and Vietnam. imports both increase.
b) and Vietnam imports both decrease.
c) increase and Vietnam imports decrease.
d) decrease and Vietnam imports increase.
Câu Hỏi 23
Other things the same, if the Vietnam real exchange rate appreciates, Vietnam net exports
Select one:
a) increase and Vietnam net capital outflow decreases.
b) decrease and Vietnam net capital outflow increases.
c) and Vietnam net capital outflow both decrease.
d) and Vietnam net capital outflow both increase.
Câu Hỏi 24
When the VND gets "weaker" relative to the USD,
Select one:
a) the U.S. trade deficit with Vietnam rises.
b) the U.S. trade deficit with Vietnam falls.
c) the U.S. trade deficit with Vietnam is unchanged.
d) None of the above necessarily happens.
Câu Hỏi 25
If purchasing-power parity holds but then U.S. prices rise, which of the following move the
exchange rate back towards purchasing-power parity?
Select one:
a) Vietnam prices rise or Vietnam’s nominal exchange rate rises
b) Vietnam prices rise or Vietnam’s nominal exchange rate falls
c) Vietnam prices fall or Vietnam’s nominal exchange rate rises
d) Vietnam prices fall or Vietnam’s nominal exchange rate falls