Openness in Goods and Financial Markets and the Goods Market in an Open Economy Flashcards
What is the equation for the real exchange rate?
What is the forumla for the uncovered interest parity condition?
The expected rate of return on foreign financial assets is reduced by expected appreciations of the domestic currency (or expected depreciations).
What do we do if?
We invest in bonds in the domestic economy because the xepected rate of return on foreign financial assets is less than the expected rate of return on assets in the domestic economy.
What do we do if?
We invest in foreign financial assets because the expected rate of return is greater than the expected rate of return on domestic bonds.
What is the formula for the demand for domestic goods in an open economy?
What is the import function?
What is the exports function?
What is equilibrium output in an open economy?
What is domestic demand in home country?
What is domestic demand in foregin country?
What is the fiscal multiplier in the home economy?
What is the fiscal multiplier in the foreign economy?
What is the formula for the trade balance?
How can the IS relation be rewritten for an open economy?
