A trade deficit implies which of the following? an outflow of financial capital. an inflow of...

A trade deficit implies which of the following?

an outflow of financial capital.

an inflow of financial capital.

imports result in fewer jobs in the domestic economy.

Foreigners profit at the expense of the domestic economy.

Solutions

Expert Solution

A trade deficit means more imports than the exports, that will lead to a financial capital inflows. The answer is "B",

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

READ ALL QUESTIONS AND ANSWERS THROUGHLY 1. Assume that there is no capital inflow outflow in...

READ ALL QUESTIONS AND ANSWERS THROUGHLY 1. Assume that there is no capital inflow outflow in the market for loanable funds, and that the federal government decides to increase borrowing in order to pay for some of their expenditire (i.e. G^). How would this policy change affect the market for loanable funds? A. increase in interest rates, increase in the quanity of loanable funds B. increase in interest rates, decreases in the quanity of loanable funds C. decrease in interest...

Because of the relationship between net capital outflow and net exports, the level of net capital outflow at the equilibrium real interest rate implies that the economy is experiencing

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 dollar. Assume that the economy is currently experiencing a balanced government budget. 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....

Classify the following changes in each of the accounts as either an outflow or an inflow of cash.

FIN101 Assignment Question(s): Classify the following changes in each of the accounts as either an outflow or an inflow of cash. Is a decrease in land and buildings an inflow or an outflow of cash? Is an increase in accounts payable an inflow or an outflow of cash? Is a decrease in vehicles an inflow or an outflow of cash? Is an increase in accounts receivable an inflow or an outflow of cash? Is the payment of...

What is a nation’s cash inflow (outflow) on its current account and its capital account given...

What is a nation’s cash inflow (outflow) on its current account and its capital account given the following information? Was there a net currency inflow or outflow? a. Bahari sells 50,000 printed t-shirts to Old Navy for $300 b. Pete sends $50 to her cousin in Chicago via Western Union c. Julian Believe purchased stock in Hennessey Co. for $220 d. Patrick is paid $60 for his business consult with Delta Airlines e. Instagram sends Shenique $40 in dividends to her BOB account f. Kodak...

Which of the following will NOT contribute to the appreciation of a currency? Persistent trade deficit...

Which of the following will NOT contribute to the appreciation of a currency? Persistent trade deficit Rampant corruption Low interest rates Social unrest High inflation

For each item listed, identify the activity and whether it is an inflow, an outflow or...

For each item listed, identify the activity and whether it is an inflow, an outflow or of a non-cash nature. Complete the table below. Item Activity Cash Flow a Dividends received b Taxation paid c Payments to suppliers and employees d Interest Paid e Purchase of property, plant, and equipment f Bonus issue of shares g Dividends paid h Proceeds on sale of investments i Interest received j Long-term borrowing k Goodwill write-down (impairment) l Profit on sale of equipment...

2a)Which of the following is not a type of financial inflow? Purchases of foreign bonds by...

2a)Which of the following is not a type of financial inflow? Purchases of foreign bonds by domestic individuals Sales of domestic stocks or bonds to foreign investors Borrowing by domestic individuals from foreign banks Sales of domestic government bonds to foreign investors b) If imports exceed exports, then there is a balance of trade _________, resulting in a financial _________. surplus; outflow surplus; inflow deficit; outflow deficit; inflow c)If net taxes exceed government purchases, then the government may __________, causing...

Following an increase in the Canadian budget deficit, it has been observed that the trade deficit...

Following an increase in the Canadian budget deficit, it has been observed that the trade deficit has increased, the Canadian real exchange rate has appreciated, the net capital outflow has decreased, and the interest rate has decreased. Which one of these events is contrary to what the open-economy macroeconomic model predicts concerning the effects of an increase in the budget deficit? a. The interest rate has decreased. b. The real exchange rate has appreciated. c. The net capital outflow has...

In the open-economy macroeconomic model, which of the following would make Mexico's net capital outflow decrease?

In the open-economy macroeconomic model, which of the following would make Mexico's net capital outflow decrease? options: a decrease in Canadian interest rates an appreciation of the Mexican peso a decrease in Mexican interest rates an increase in Mexico's net exports

Which of the following statements about financial capital is true? A. Financial capital is not important....

Which of the following statements about financial capital is true? A. Financial capital is not important. B. Financial capital is used to facilitate a business enterprise and can come from both investors and savings. C. Financial capital is something an entrepreneur does not have to worry about. D. Financial capital includes the physical facilities of a company. E. Financial capital is not used to operate a company.

Subjects