1. A country has $20 million of domestic investment and net capital outflow of $10 million....

1. A country has $20 million of domestic investment and net capital outflow of $10 million. What is saving? show work

2. If a dollar currently purchases 10 pesos and someone forecasts that in a year it will be 11 pesos, then the forecast is given in nominal terms and implies the dollar will _____appreciate____________(Appreciate/Depreciate).

3. A U.S. purchase of oil from overseas paid for with foreign currency it already owned _________(increases/decreases) U.S. net exports, and ______________(increases/decreases) U.S. net capital outflow

Expert Solution

1. Ans

Savings = Investment(I)+Net Capital Outflow(NCO)

Savings = 20+10

Savings = $30 million

2. Ans

If a dollar currently purchases 10 pesos and someone forecasts that in a year it will be 11 pesos, then the forecast is given in nominal terms and implies the dollar will appreciate.

3. Ans

A US purchase of oil from overseas paid for with foreign currency it already owned decreases US net exports, and decreases US net capital outflow.

Rahul Sunny answered 2 years ago

Investment is related to the interest rate, while net capital outflow (NCO) is related...

Investment is ________ related to the interest rate, while net capital outflow (NCO) is ________ related to the interest rate. positively; negatively positively; positively negatively; negatively negatively; positively Using the information in the table shown, what is the inflation rate in 2014? Year CPI 2012 121.7 2013 122.8 2014 125.2 2015 126.6 2016 128.4 - 1 % None of the above It cannot be calculated without knowing the base year. 0.9 % As new goods and services become available: the...

in an open economy national saving equals domestic invest,ent plus net capital outflow. true or false

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....

Consider the factors that affect the net exports and the net capital outflow and discuss why...

Consider the factors that affect the net exports and the net capital outflow and discuss why these two magnitudes are equal. If you consider that Turkey, has a low savings rate, which variable is to change and how would this affect the nominal and real exchange rates?

6. If domestic saving is less than domestic investment, then net exports are ______ and net...

6. If domestic saving is less than domestic investment, then net exports are ______ and net capital outflows are _____. A. positive; positive B. positive; negative C. negative; negative D. negative; positive 7. In a small, open economy, if domestic saving exceeds domestic investment, then the extra saving will be used to A. make loans to the domestic government B. make loans to foreigners C. repay the national debt D. repay loans to the federal reserve 8. A trade deficit...

1. Suppose that Canadian investors decide that investment opportunities in African countries have improved. What happens to Canadian net capital outflow?

1. Suppose that Canadian investors decide that investment opportunities in African countries have improved. What happens to Canadian net capital outflow? What happens to the Canadian real interest rate? 2. Suppose that Canadian citizens start saving more. What does this imply about the supply of loanable funds and the equilibrium real interest rate? What happens to the real exchange rate? 3. Explain how an increase in the price level changes interest rates. How does this change in interest rates lead to changes in...

3. Which statement is consistent with negative net exports? a. Net capital outflow is positive,...

3. Which statement is consistent with negative net exports? a. Net capital outflow is positive, so foreign assets bought by Canadians are greater than Canadian assets bought by foreigners. b. Net capital outflow is positive, so Canadian assets bought by foreigners are greater than foreign assets bought by Canadians. c. Net capital outflow is negative, so foreign assets bought by Canadians are greater than Canadian assets bought by foreigners. d. Net capital outflow is negative, so...

17. What is Net capital outflow (NCO) what is the equality of Net Exports (NX) and...

17. What is Net capital outflow (NCO) what is the equality of Net Exports (NX) and Net Capital Outflow?

For an open economy with perfect capital mobility, when net capital outflow is measured along the...

For an open economy with perfect capital mobility, when net capital outflow is measured along the horizontal axis and the real interest rate is measured along the vertical axis, net capital outflow is drawn as a: horizontal line at the world real interest rate. line that slopes down and to the right. vertical line at 0. line that slopes up and to the right. Please explain, thank you,

Suppose that you countrymen decide to increase their saving. If the elasticity of net capital outflow...

Suppose that you countrymen decide to increase their saving. If the elasticity of net capital outflow with respect to the real interest rate is very high, will this increase in private saving have a large or small effect in domestic investment?

Question