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 31.1, Problem 1QQ
To determine
Define net export and net capital outflow.
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Check out a sample textbook solutionStudents have asked these similar questions
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?
a) Would each of the following transactions be included in net exports or net capital outflow? Be sure to say whether it would represent an increase or decrease in that variable.
i) An Indian buys a Samsung TV
ii) An Indian buys a share of sony stock
iii) The sony pension fund buys a bond from the Indian government
iv) A worker at a Toyota plant in Japan buys some Nagpur oranges from an Indian farmer
would each of the following transactions
be included in net exports or net capital
outflow? Please also tell whether it would
represent an increase or a decrease
in that variable.
i. A Pakistani buys a Sony TV.
ii. A Pakistani buys a share of Sony stock.
iii. The Sony pension fund buys a bond
from Pakistani Treasury.
iv. A worker at a Sony plant in Japan buys
some mango from a Pakistani
farmer.
Chapter 31 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
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Similar questions
- Under 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_forwardWhy are net exports and net capital outflow always equal? Derive the relation between savings,domestic investment, and net capital outflow using the national income accounting identity.arrow_forwardWould each of the following transactions be included in U.S. net exports or in U.S. Net capital outflow? An American buys a Sony TV.b.An American buys a share of Sony stock.c.The Sony pension fund buys a bond from the U.S. Treasuryd.A worker at a Sony plant in Japan buys some Georgia peaches form an American farmer.arrow_forward
- how is the balance of payments linked to national saving and investment? explain.arrow_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_forwardSuppose there is an increase in foreign output. Show the effect on the domestic economy . What is the effect on domestic output? On domestic net exports?arrow_forward
- Consider the following open economy. Real GDP Consumption Government Expenditures Investment Exports Taxes Transfers 1,000 800 115 280 22 195 79 What is net foreign investment (NFI)? Round to two decimal places, enter the negative sign if appropriate, and do not enter a currency symbol. If your answer is $1.125, enter 1.13.arrow_forwardFor Turkey, would each of the following transactions affect net exports or net capital outflow or both? In addition, would the same transactions represent an increase or a decrease in that variable? For each transaction, choose the correct answer from the drop down menu: Al Kharafi family from Kuwait buys a house in Trabzon. Choose. Türk Telekom buys network equipment from Ericsson, a Choose. firm in Sweden. Increase Net Exports, Decrease Net Capital Outflow Katya and Igor Oblomov from Moscow spend their Decrease Net Exports, Decrease Net Capital Outflow vacation in Antalya. Decrease Net Exports, Increase Net Capital Outflow Ford Otosan sells Transit vans to Germany. Increase Net Capital Outflow Arçelik buys Hitachi's Asian business for $300 million. Decrease Net Capital Outflow Increase Net Exports, Increase Net Capital Outflowarrow_forwardHow do fluctuating exchange rates benefit MNCs and how do they affect them negatively? Give an example of both.arrow_forward
- What is Foreign Direct Investment (FDI) all about?arrow_forwardWhat are the benefits and costs associated with foreign portfolio investment (FPI)?arrow_forwardWhat is the saving and investment equation? If national saving declines what will happen to domestic investment and net foreign investment?arrow_forward
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