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?

Expert Solution

Rahul Sunny answered 1 year 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...

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?

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....

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...

The basic relation in open economy macroeconomics is NX = NCO. What is the relation of...

The basic relation in open economy macroeconomics is NX = NCO. What is the relation of this equation with the savings and if investments is to exceed savings, what is to be done?

Use the information in the table below to calculate Net Exports (NX) and gross domestic product...

Use the information in the table below to calculate Net Exports (NX) and gross domestic product (GDP), in billions of dollars. Consumption Spending. . . . . .. . . . . . . . . . $12,000 billion Gross Investment Spending . . . . . . . . . . . . $3,100 billion Government Purchases. . . . . . . . . . . . . . . $3,400 billion Exports . . . . . . . . . ....

The following graphs depict the market for loanable funds and the relationship between the real interest rate and the level of net capital outflow (NCO) measured in terms of the Mexican currency, the peso.

The following graphs depict the market for loanable funds and the relationship between the real interest rate and the level of net capital outflow (NCO) measured in terms of the Mexican currency, the peso. Complete the first row of the table to reflect the state of the markets in Mexico. Summarize the results of capital flight. Real Interest Rate Net Capital Outflow (NCO) (Percent) (Billions of pesos) Initial state After capital flight Now, suppose that Mexico experiences a sudden...

MPQ: NX = NCO Identity 1. The balance of payments identity states that: a. savings equal...

MPQ: NX = NCO Identity 1. The balance of payments identity states that: a. savings equal investments plus net capital outflow b. Investments equal savings c. Net exports equal net capital flow d. Savings equals investment plus net capital outflow 2. Countries that have a trade deficit have a (Click to select) net capital outflow. a. positive b.constant c. negative 3. If Country X purchases goods from Country Y valued at $400 and sells $500 worth of its own goods to...

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,

In the open-economy macroeconomic model, what would make Panama’s net capital outflow decrease? a. a decrease in...

In the open-economy macroeconomic model, what would make Panama’s net capital outflow decrease? a. a decrease in Canadian interest rates b. a decrease in Panamanian interest rates c. an appreciation of the Panamanian balboa d. an increase in Panama’s net exports 21. Which of the following shifts aggregate demand to the right? a. a decrease in the money supply b. technological improvement that increases the profitability of capital investments c. the repeal of an investment tax credit d. a decrease in the price level 22. Which of the following shifts...

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