ECON 1BB3 Lecture Notes - Capital Outflow, Real Interest Rate, Automotive Products

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ECON 1BB3 Full Course Notes
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ECON 1BB3 Full Course Notes
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Economics 1bb3 march 5th, 2013: (start of chapter 12) Exports: goods and services that are produced domestically and sold abroad. Imports: goods and services that are produced abroad and sold domestically. Factors affecting the trade balance: tastes (foreign/domestic goods, prices (foreign/domestic goods, exchange rates, income (foreign/domestic goods, transportation costs, government trade policies. Question: which industry is the largest in terms of canadian exports: energy products, industrial goods and materials, machinery and equipment, automotive products, agricultural products. Net capital outflow (nco): the purchase of the foreign assets by domestic residents minus the purchase of domestic assets by foreign residents. Net capital outflow is also called net foreign investment (nfi) Factors affecting net capital outflow include: real interest rate on domestic/foreign assets, economic and political risk of holding assets abroad, government policies affecting foreign ownership of domestic assets. Foreign direct investment: a capital investment that is owned and operated by a foreign entity -> day-to-day control management decisions.

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