3. Net capital outflow and net exports Net Capital Outflow Net ExportsThat is, any transaction that affects the left side of this equation must also affect the right side. The following problem provides ascenario that illustrates why this identity must remain true.Suppose you work as the purchasing manager for a national chain of buffet restaurants in the United States, and it is time to place your annual orderof hot chili oil. You pay $2,500,000 for a shipment of chili oil from a producer in South Korea..Determine the effects of this transaction on exports, imports, and net exports in the U.S. economy, and enter your results in the following table. If thedirection of change is "No change," enter "0" in the Magnitude of Change column.Hint: The magnitude of change should always be positive, regardless of the direction of change.ExportsImportsNet ExportsDirection of ChangeMagnitude of Change(Dollars)in U.S. net exports is matched byBecause of the identity equation that relates to net exports, theoutflow. Which of the following is an example of how the United States might be affected in this scenario? Check all that apply.The United States sells $2,500,000 worth of bonds to the South Korean chili oil producer.The South Korean chili oil producer purchases $2,500,000 worth of stock spread out over a few U.S. companies.The South Korean chili oil producer hangs on to the $2,500,000 so that it can use the U.S. dollars to make investments.in U.S. net capital 3. Net capital outflow and net exportsAn open economy interacts with the rest of the world through involvement in world financial markets, and also world markets for goodsand services. Despite the fact that this involvement often results in an imbalance in these markets, the following identity must hold:Net Capital Outflow = Net ExportsThat is, any transaction that affects the left side of this equation must also affect the right side. The following problem provides ascenario that illustrates why this identity must remain true.Suppose you work as the purchasing manager for a national chain of buffet restaurants in the United States, and it is time to place your annual orderof hot chili oil. You pay $2,500,000 for a shipment of chili oil from a producer in South Korea..Determine the effects of this transaction on exports, imports, and net exports in the U.S. economy, and enter your results in the following table. If thedirection of change is "No change," enter "0" in the Magnitude of Change column.Hint: The magnitude of change should always be positive, regardless of the direction of change.Magnitude of Change(Dollars)ExportsImportsNet ExportsDirection of ChangeBecause of the identity equation that relates to net exports, thein U.S. net exports is matched byin U.S. net capital

Capital inflows are described as net purchases (difference between purchases and sales) of domestic…

An open economy interacts with the rest of the world through involvement in world financial markets, and also world markets for goods and services. Despite the fact that this involvement often results in an imbalance in these markets, the following identity must hold: Net Capital Outflow = Net Exports That is, any transaction that affects the left side of this equation must also affect the right side. The following problem provides a scenario that illustrates why this identity must remain true. Suppose you work as the purchasing manager for a national chain of buffet restaurants in the United States, and it is time to place your annual order of hot chili oil. You pay $2,500,000 for a shipment of chili oil from a producer in South Korea.. Determine the effects of this transaction on exports, imports, and net exports in the U.S. economy, and enter your results in the following table. If the direction of change is "No change," enter "0" in the Magnitude of Change column. Hint: The magnitude of change should always be positive, regardless of the direction of change. Magnitude of Change (Dollars) Exports Imports Net Exports Direction of Change atched by in U.S. net capital

An open economy interacts with the rest of the world through involvement in world financial markets, and also world markets for goods and services. Despite the fact that this involvement often results in an imbalance in these markets, the following identity must hold: Net Capital Outflow = Net Exports That is, any transaction that affects the left side of this equation must also affect the right side. The following problem provides a scenario that illustrates why this identity must remain true. Suppose you work as the purchasing manager for a national chain of buffet restaurants in the United States, and it is time to place your annual order of hot chili oil. You pay $2,500,000 for a shipment of chili oil from a producer in South Korea.. Determine the effects of this transaction on exports, imports, and net exports in the U.S. economy, and enter your results in the following table. If the direction of change is "No change," enter "0" in the Magnitude of Change column. Hint: The magnitude of change should always be positive, regardless of the direction of change. Magnitude of Change (Dollars) Exports Imports Net Exports Direction of Change atched by in U.S. net capital

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter31: Open-Economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 4PA

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4. Net capital outflow and net exports An open economy interacts with the rest of the world through involvement in world financial markets, and also world markets for goods and services. Despite the fact that this involvement often results in an imbalance in these markets, the following identity must hold: Net Capital Out flow = Net Exports That is, any transaction that affects the left side of this equation must also affect the right side. The following problem provides a scenario that illustrates why this identity must remain true. Suppose you work as the purchasing manager for a national chain of buffet restaurants in the United States, and it is time to place your annual order of hot chili oil. You pay $2,500,000 for a shipment of chili oil from a producer in South Korea. Determine the effects of this transaction on exports, imports, and net exports in the U.S. economy, and direction of change is "No change," enter "0" in the Magnitude of Change column. Hint: The magnitude of…
4. Net capital outflow and net exports An open economy interacts with the rest of the world through its involvement in world markets for goods and services and world financial markets. Although it can often result in an imbalance in these markets, the following identity must remain true: Net Capital Outflow = Net Exports In other words, if a transaction directly affects the left side of this equation, then :must also affect the right side. The following problem will help you understand why this identity must hold. Suppose you are a fashion designer living in the United States, and a trendy boutique in Bangkok just purchased your entire inventory for THB 90,000. Determine the effects of this transaction on exports, imports, and net exports in the U.S. economy, and enter your results in the following table. If the direction of change is "No change," enter "0" in the Magnitude of Change column. Hint: The magnitude of change should always be positive, regardless of the direction of change.…
7. For each of the following, specify whether the foreign direct investment is hori- zontal or vertical; in addition, describe whether that investment represents an FDI inflow or outflow from the countries that are mentioned. a. Vodafone (a U.K.-based company) plans to improve its network and services in Romania after the results in this market lagged behind other countries. b. General Electric (an American company) buys Alstom (another American company) energy assets. c. Exxon (an American company) plans the construction of new delayed coker unit in Belgium. d. PetroChina (a Chinese company) plans to invest in global oil and natural gas assets in a venture in Western Australia.
this question has three questions . What proportion of this country’s total gross capital formation (or investment) can be financed from national savings, and what part must be financed from external resources? What are the various forms these external resources could take? show in graph how the current account got a deficit of 12% GDP and the budget deficit of 3%. Suppose a country has a large current account deficit (in the vicinity of 12% of GDP). It has a gross capital formation rate of 28% of GDP. The country has an overall budget deficit of 3% of GDP. The share of Household and NPISHs Final Consumption Expenditure is 68% of GDP and that of General Government Final Consumption Expenditure is 12%. What proportion of this country’s total gross capital formation (or investment) can be financed from national savings and what part must be financed from external resources? What are the various forms these external resources could take?
6. In the exchange rate model in Example 7.2, supposethe company continues to manufacture its product inthe United States, but now it sells its product in theUnited States, the United Kingdom, and possibly othercountries. The company can independently set its pricein each country where it sells. For example, the pricecould be $150 in the United States and £110 in theUnited Kingdom. You can assume that the demandfunction in each country is of the constant elasticityform, each with its own parameters. The question iswhether the company can use Solver independently ineach country to find the optimal price in this country.(You should be able to answer this question withoutactually running any Solver model(s), but you mightwant to experiment, just to verify your reasoning.)
Figure 32-6 Refer to this diagram of the open-economy macroeconomic model to answer the questions below. 13 12 r1 d O b. e4 O c. el O d. e2 b A L B e5 e4 e3 e2 el Refer to Figure 32-6. If the economy were initially in equilibrium at rl and e3 and the government removes import quotas, the exchange rate moves to O a. e5
According to the open-economy macroeconomic model, import quotas increase which of the following O a. net exports and net capital outflow O b. net exports but not net capital outflow. O c. net capital outflow but not net exports. O d. neither net exports nor net capital outflow.
9. Consider savings-investment diagrams assuming that there are two countries in the world, A and B. Initially, both countries are identical, i.e., they have the same supply of savings and demand for investment. Therefore, even as open economies, they both have balanced current accounts, i.e., neither has a deficit or surplus. Now assume that in country A, the government increases the budget deficit, shifting the supply of savings to the left. If all other curves (A s investment demand, B s savings supply, B s investment demand) stay the same, what will the effect of the increase in A's budget deficit? a. Country B will have a CA surplus. b. Country A will have a KFA deficit. c. Investment in country B will increase. d. The world real interest rate will fall.
Kindly answer this question as soon as you can For each of the following, specify whether the foreign direct investment is horizontal or vertical; in addition, describe whether that investment represents an FDI inflow or outflow from the countries that are mentioned. a. McDonald’s (a U.S. multinational) opens up and operates new restaurants in Europe. b. Total (a French oil multinational) buys ownership and exploration rights to oil fields in Cameroon. c. Volkswagen (a German multinational auto producer) opens some new dealerships in the United States. (Note that, at this time, Volkswagen does not produce any cars in the United States.) d. Nestlé (a Swiss multinational producer of foods and drinks) builds a new production factory in Bulgaria to produce Kit Kat chocolate bars. (Kit Kat bars are produced by Nestlé in 17 countries around the world.)
6. Define the terms “net exports" and "net capital outflow". How are the two variables related in an open economy with clearing markets?
Suppose that the local real interest rate rises relative to real interest rates in other countries. This increase would make foreigners Question 22 Not yet answered Select one: Marked out of 1.00 a. more willing to purchase local bonds, so capital inflow would rise. P Flag O b. more willing to purchase local bonds, so capital inflow would fall. question c. less willing to purchase local bonds, so capital inflow would rise. O d. less willing to purchase local bonds, so capital inflow would fall. Previous page Next page Reset user tour on this page DEC 山T四A tv MacBook Pro esc ....
Hand written plz If a country switches from a flexible exchange rate regime to a fixed exchange rate regime, this implies that: O a given change in government spending will now have a greater effect on output both fiscal and monetary policy will become more effective in changing GDP O both fiscal and monetary policy will become completely ineffective in changing GDP O monetary policy will become a more effective tool for changing output O a given change in government spending will now have a smaller effect on output