1. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. Chapter 6 International Trade, Exchange Rates, and Macroeconomic Policy

2. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 6-2 Table 6-1 The U.S. Balance of Payments, Selected Years

3. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 6-3 Figure 6-1 The U.S. Current Account Balance and Its Net International Investment Position, 1975–2004

4. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 6-4 Table 6-2 Daily Quotations of Foreign Exchange Rates

5. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 6-5 Figure 6-2 Foreign Exchange Rates of the Dollar Against Four Major Currencies, Quarterly, 1970–2005 (1 of 2)

6. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 6-6 Figure 6-2 Foreign Exchange Rates of the Dollar Against Four Major Currencies, Quarterly, 1970–2005 (2 of 2)

7. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 6-7 Figure 6-2 Foreign Exchange Rates of the Dollar Against Four Major Currencies, Quarterly, 1970–2005

8. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 6-8 Figure 6-3 Determination of the Price in Swiss Francs of the Dollar

9. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 6-9 International Perspective Big Mac Meets PPP

10. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 6-10 Figure 6-4 Nominal and Real Effective Exchange Rates of the Dollar, 1970–2004

11. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 6-11 Figure 6-5 Foreign Official Holdings of Dollar Reserves as a Percent of U.S. GDP

12. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 6-12 Figure 6-6 U.S. Real Net Exports and the Real Exchange Rate of the Dollar, 1970–2004

13. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 6-13 Figure 6-7 The U.S. Real Corporate Bond Rate and the Real Exchange Rate of the Dollar, 1970–2004

14. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 6-14 Figure 6-8 Effect of an Increase in the Money Supply with Fixed Exchange Rates

15. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 6-15 Figure 6-9 Effect of a Fiscal Policy Stimulus with Fixed Exchange Rates

16. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 6-16 Figure 6-10 Effect of a Monetary and Fiscal Policy Stimulus with Flexible Exchange Rates

17. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 6-17 Figure 6-11 The BP Line in a Small and Large Open Economy

18. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 6-18 Summary of Monetary and Fiscal Policy Effects in Open Economies