Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 31, Problem 3QCMC
To determine
Changes in volume of export and import.
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Argentina has net capital outflow of $2,000, government purchases of $10,000 and consumption of $40,000. Which of the
following is correct?
If its domestic investment is $2,000, its GDP is $52,000.
If its domestic investment is $4,000, its GDP is $56,000.
If its domestic investment is $10,000, its GDP is $58,000.
None of the above are correct.
b.
d.
A
B
D
b
If the value of a nation’s imports exceeds the valueof its exports, which of the following is NOT true?a. Net exports are negative.b. GDP is less than the sum of consumption,investment, and government purchases.c. Domestic investment is greater than nationalsaving.d. The nation is experiencing a net outflow ofcapital.
Ifthe value of a nation's imports exceeds the value of its exports,which of the following
is NOT true?
a.Net exports are negative.
b.GDP is less than the sum of consumption, investment, and government purchases.
c.Domestic investment is greater than national saving.
d.The nation is experiencing a net outflow of capita
Chapter 31 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
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- Studies indicate that net exports and net capital outflows tend to be equal. 1. Explain why net exports and net capital outflows always tend to be equal. 2. Explain how a change in interest rates can lead to changes in net exports?arrow_forwardWhat is the term for the difference between the value of a country's exports and the value of its imports? A. Trade deficit B. Trade balance C. Trade surplus D. Net exportsarrow_forwardDo foreign direct investments have direct impact on gross domestic product?arrow_forward
- Discuss the role of budget surpluses and trade surpluses in national saving and investmentarrow_forwardQUESTION 48 The equilibrium level of income in an open economy is where: B. Consumption + Savings = Imports + Exports. C. Savings + Exports = Investment + Exports. D. Savings + Imports = Investment + Exports.arrow_forwardA country’s investment is 8, its government spends 10 and raises 9 in taxes, and its current account is -2. Find the country’s private saving. Find the country’s public saving. How much net investment does the country receive from the rest of the world?arrow_forward
- Which of the following would be U.S. foreign direct investment? A. A U.S. canning factory opens a plant in Ecuador. B. A Bolivian bank buys U.S. corporate bonds. C. A Polish company opens a shipbuilding plant in the United States. D. A U.S. bank buys Bolivian corporate bonds.arrow_forwardUnder a closed system, when net exports equals 0, what must be true about investment spending? A Investment Consumption B Investment = Savings (C) Investment = Government Spending D) Investment Government spending - taxesarrow_forwardSince the early 2000s, the U.S. net exports of services has _____________ and U.S. net exports of goods has _____________. a. increased, decreased b. decreased, increased c. increased, increased d. decreased, decreasedarrow_forward
- The country of Bahrain does not trade with any other country. Its GDP is $20 billion. Its government collects $4 billion in taxes and pays out $3 billion to households in the form of transfer payments. Consumption equals $15 billion and investment equals $2 billion. What is public saving in Bahrain, and what is the value of the goods and services purchased by the government of Bahrain?arrow_forwardWhich of the following are direct foreign investments, and which are not? Event a. A French company merges with an American company; stockholders in the U.S. company exchange their stock for shares in the French firm. b. The same Saudi businessman buys a New York apartment building. c. A Saudi businessman buys $10 million of IBM stock. Is this a direct foreign investment? d. An Italian firm builds a plant in Russia and manages the plant as a contractor to the Russian government. Yes Yes No Noarrow_forwardWould each of the following transactions be includedin U.S. net exports or in U.S. net capital outflow?Indicate whether it would represent an increase or adecrease in that variable.a. An American buys a Sony TV.b. An American buys a share of Sony stock.c. The Sony pension fund buys a bond from theU.S. Treasury.d. A worker at a Sony plant in Japan buys someGeorgia peaches from an American farmer.arrow_forward
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