ECONOM 1015 Chapter Notes - Chapter 18: Substitute Good
Document Summary
Two ways open economies interact other economies: buy and sells goods and services in world product markets, buys and sells capital assets such as stocks and bonds in world financial markets. The flow of goods: exports, imports, and net exports. Exports are domestically produced goods and services that are sold abroad. Imports are foreign-produced goods and services that are sold domestically. Net exports of any country are the difference between the value of its exports: net exports=value of country"s exports-value of country"s imports, also called trade balance and the value of its imports: When net exports are positive it"s a trade surplus. When net exports are negative it"s a trade deficit. Factors that influences exports, imports, and net exports are: Increase in international trade is due to: improvements in transportation, advances in telecommunications, technological progress, governments trade policies. The flow of financial resources: net capital outflow.