Chapter 10 Formulas and Definitions All symbols are as in the textbook and lectures. Unless otherwise stated, you can assume that two countries have purchasing power parity (PPP) and interest rate parity. Exchange rate when there is PPP: R = P / P*. In this formula, P and P* can be regarded as prices of individual goods or of consumption baskets. Approximate relationship when there is interest rate parity: i – i* = (F – R)/R. For the purpose of this test, take this equation to be exact, not approximate. You can also use the equivalent equation i – i* = F/R – 1. For this formula to work, i and i* must be fractional, not percentages. So, a domestic interest rate of 1.34% is written i=1.0134, a foreign interest rate of 22.5% is written i*=1.225. Note that you may be asked to enter answers as percentages, though. ***************************** A U.S. firm has a contract to export automobiles to Malaysia. The contract stipulates that the firm will be paid a certain amount of Malaysian ringgits when it delivers the automobiles six months in the future. This firm wants to hedge (reduce its foreign currency risk). It would do so by

The most immediate cause of an exchange rate crisis is

Chapter 9 Formulas and Definitions All symbols are as in the textbook and lectures. CA + FA = 0, ignoring KA, and except for the statistical discrepancy GDP = C + I + G + X – M GNP = GDP + net primary income + net secondary income GNP = C + I + G + CA S + (T – G) = I + CA ********************************* If there is a trade deficit, which of the following is true?

Chapter 9 Formulas and Definitions All symbols are as in the textbook and lectures. CA + FA = 0, ignoring KA, and except for the statistical discrepancy GDP = C + I + G + X – M GNP = GDP + net primary income + net secondary income GNP = C + I + G + CA S + (T – G) = I + CA ********************************************* Information for questions 8-9 Consider the following hypothetical information on the National Income and Product Accounts for South Korea. South Korea’s Capital Account is 0. The amounts are in billions of dollars, but ignore the “billions” part, that is, just treat the numbers as whole numbers in dollars. For all questions, enter a whole number of the appropriate sign. Enter 0 if the answer cannot be obtained with the information given. Only the exact answer is accepted, so double check your calculations. Calculate South Korea’s private savings.

Chapter 9 Formulas and Definitions All symbols are as in the textbook and lectures. CA + FA = 0, ignoring KA, and except for the statistical discrepancy GDP = C + I + G + X – M GNP = GDP + net primary income + net secondary income GNP = C + I + G + CA S + (T – G) = I + CA ********************************************* Information for questions 1-3 The table below lists the major items in a country’s Balance of Payments accounts. This country’s Capital Account is 0. The amounts are in billions of dollars, but ignore the “billions” part, that is, just treat the numbers as whole numbers in dollars. For all questions, enter a whole number of the appropriate sign. Enter 0 if the answer cannot be obtained with the information given. Only exact answer is accepted, so double check your calculations.  Are the country’s factors of production (capital and labor) employed abroad earning more or less than foreign factors of production (capital and labor) employed in this country? Calculate the difference: money earned abroad by this country’s factors of production – money earned in this country by foreign factors of production. This difference can be positive or negative, make sure to enter the right sign.

Damage to the dorsal stream may interfere with:  

Why is it that every axon in an adult mammal has a target cell (muscle cell or other neuron) with which it makes synaptic contact?

Light enters the eye through an opening in the center of the iris called the:

When researchers average together snippets of EEG corresponding to individual events, this method is referred to as:

Damage to the ventral stream may interfere with: