MEDIUM
12TH CBSE
IMPORTANT
Earn 100

What are official reserve transactions? Explain their importance in the balance of payments.

Important Questions on Open Economy Macroeconomics

HARD
12TH CBSE
IMPORTANT
Introductory Macroeconomics>Chapter 6 - Open Economy Macroeconomics>Q 3
Distinguish between the nominal exchange rate and the real exchange rate. If you were to decide whether to buy domestic goods or foreign goods, which rate would be more relevant? Explain.
HARD
12TH CBSE
IMPORTANT
Introductory Macroeconomics>Chapter 6 - Open Economy Macroeconomics>Q 4
Suppose it takes 1.25 yen to buy a rupee, and the price level in Japan is 3 and the price level in India is 1.2. Calculate the real exchange rate between India and Japan (the price of Japanese goods in terms of Indian goods).
HARD
12TH CBSE
IMPORTANT
Introductory Macroeconomics>Chapter 6 - Open Economy Macroeconomics>Q 5
Explain the automatic mechanism by which BoP equilibrium was achieved under the gold standard.
HARD
12TH CBSE
IMPORTANT
Introductory Macroeconomics>Chapter 6 - Open Economy Macroeconomics>Q 6
How is the exchange rate determined under a flexible exchange rate regime?
HARD
12TH CBSE
IMPORTANT
Introductory Macroeconomics>Chapter 6 - Open Economy Macroeconomics>Q 7
Differentiate between devaluation and depreciation.
HARD
12TH CBSE
IMPORTANT
Introductory Macroeconomics>Chapter 6 - Open Economy Macroeconomics>Q 8
Would the central bank need to intervene in a managed floating system? Explain why.
HARD
12TH CBSE
IMPORTANT
Introductory Macroeconomics>Chapter 6 - Open Economy Macroeconomics>Q 9
Are the concepts of demand for domestic goods and domestic demand for goods the same?
MEDIUM
12TH CBSE
IMPORTANT
Introductory Macroeconomics>Chapter 6 - Open Economy Macroeconomics>Q 10
What is the marginal propensity to import when M = 60 + 0.06Y? What is the relationship between the marginal propensity to import and the aggregate demand function?