Chapter 19 - A Macroeconomic Theory of the Open Economy

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9 Terms

1

Tariff

________- a tax on imported goods.

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2

Capital flight

________- a large and sudden reduction in the demand for assets located in a country.

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3

Trade

________ policy- a government policy that directly influences the number of goods and services that a country imports or exports.

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4

Government budget deficit

________ represents a negative public saving.

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5

equilibrium interest rate

At the ________, the amount that people want to save exactly balances the desired quantities of domestic investment and net capital outflow.

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6

Import quota

________- a limit on the quantity of a good produced abroad that can be sold domestically.

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7

Net capital outflow curve

________ is the link between the market for loanable funds and the market for foreign currency exchange.

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8

Net Capital Outflow

________: The Link between the Two Markets:**

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9

net capital outflow

The ________ does not depend on the exchange rate.

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