When a U.S. firm sells a good abroad for, say, 100 euros (assume $1.5=1 euro), U.S. net exports increase by $150. These $150 in exports can be accounted for as $150 increase in capital outflow because O if the U.S. firm uses the proceeds to buy a U.S. bond, capital investment in the foreign country has increased O private consumption in the foreign country increases by $150 O if the U.S. firm uses the 100 euros to buy a share of stock in a foreign firm, the firm is supplying U.S. capital to that foreign firm Call of the above Onone of the above

When a U.S. firm sells a good abroad for, say, 100 euros (assume $1.5=1 euro), U.S. net exports increase by $150. These $150 in exports can be accounted for as $150 increase in capital outflow because O if the U.S. firm uses the proceeds to buy a U.S. bond, capital investment in the foreign country has increased O private consumption in the foreign country increases by $150 O if the U.S. firm uses the 100 euros to buy a share of stock in a foreign firm, the firm is supplying U.S. capital to that foreign firm Call of the above Onone of the above

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

8. In an open economy, if the marginal propensity to save s = .20 and the marginal propensity to import m = .30, then what should be the foreign trade multiplier? A) 2 B) C) D) Answer: 9. 3.33 5 10 Which of the following is an example of a capital inflow for the US? A domestic decrease of assets held by foreign investors A domestic increase of assets held by foreign investors 10. A) B) C) D) Answer: An increase in US foreign asset holdings Importing of goods and services
A car costs $20,000 in the U.S. The exchange rate between the euro and the dollar is 0.813 euros per dollar. Ignoring transportation and other similar costs, what would be the euro price of the same car in France? Select one: O a. 28,000 euros O b. 16,260 euros O c. 24,600 euros O d. 15,300 euros Check
If Italian demand for Canadian lumber decreases, the supply of Canadian dollars to the foreign-exchange market will and the demand for euros will therefore O A. remain the same; remain the same O B. increase; decrease O C. increase; remain the same O D. decrease; increase O E. decrease; decrease
Suppose that Great Britain and the United States are trading partners. Assume that the initial exchange rate in Great Britain is £0.76= 1$. Now suppose that the opportunity cost of consumption in the United States begin to rise. Which of the following explain what is expected to happen in the British forex market? O The demand for British pounds will decrease, leading to a depreciation of the US dollar. O The supply of British pounds will increase, leading to an appreciation of the British pound. O The supply of American dollars will decrease, leading to a depreciation of the British pound. O The demand for American dollars will decrease, leading to an appreciation of the British pound. Please do fast ASAP fast
If U.S. residents purchase $600 billion worth of foreign assets and foreigner residents purchase $300 billion worth of U.S. assets, OA. U.S. net capital outflow is $300 billion; capital is flowing into the U.S. OB. U.S. net capital outflow is -$300 billion; capital is flowing into the U.S. OC. U.S. net capital outflow is -$300 billion; capital is flowing out of the U.S. OD. U.S. net capital outflow is $300 billion; capital is flowing out of the U.S. Reset Selection
Urgent!!
O either positive or negative Question 9 If Tony Stark provides consulting services to a firm in Sweden, this is then counted as a O credit in the current account debit in the current account credit in the capital account O debit in the capital account Question 10 If Dominic Toretto purchases a Toyota Supra that comes from Japan, this is then counted as a O credit in the current account O debit in the current account O credit in the capital account O debit in the capital account MacBook Air
D7
6
Consider a hypothetical open economy. The following table presents data on the relationship between various real interest rates and national saving, domestic investment, and net capital outflow in this economy, where the currency is the U.S. dollar. Assume that the economy is currently experiencing a balanced government budget. Real Interest Rate National Saving Domestic Investment Net Capital Outflow (Percent) (Billions of dollars) (Billions of dollars) (Billions of dollars) 7 60 25 -10 6 55 30 -5 5 50 35 0 4 45 40 5 3 40 45 10 2 35 50 15 Given the information in the preceding table, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange points (square symbol) to plot the supply of loanable funds. Finally, use the black point (cross symbol) to indicate the equilibrium in this market. On the following graph, plot the relationship between the real…
Consider a small economy that does not permit international borrowing or lending. The country's autarky real interest rate is greater than the world real interest rate. Now suppose the economy removed capital controls. Which of the following is true? There is an excess supply of capital in the domestic economy and capital flows in O There is an excess demand for capital in the domestic economy and capital flows out There is an excess demand for capital in the domestic economy and capital flows in O There is an excess supply of capital in the domestic economy and capital flows out
In periods of rapid U.S. growth, the rapid growth usually adds to large U.S. trade deficits by: O increasing U.S. national income, which increased U.S. imports. O reducing real interest rates in the United States. O increasing U.S. national income, which decreased U.S. exports. O increasing U.S. tax revenues and reducing the Federal budget deficit.