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ECON 102 Lecture Notes - Lecture 12: Japanese Yen, Real Interest Rate, Open Economy

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School
UBC Okanagan, UBC OK
Department
Economics
Course
ECON 102
Professor
Karl Pinno

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Document Summary

This equation holds because every transaction that affects one side of this equation must also affect the other side by exactly the same amount. !1: when nx > 0, the country is selling more goods ad services to foreigners than it is buying from them, what is it doing with the foreign currency it receives from the net sale of goods and. Saving, investment, and their relationship to the international flows. Saving, investment, and international capital ows are inextricably linked. Y = c + i + g + xn. Y c g = i + xn. The prices for international transactions: real and nominal exchange rates: two important international prices discussed here: Tuesday, november 22, 2016: the nominal x-rate, the real x-rates. Note: for example, when the exchange rate rises from 80 to 90 yen per dollar, the dollar is said to appreciate.

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Related Questions

In an open economy, national saving equals domestic investment: 
 
(i) plus the net outflow of capital abroad. 
(ii) minus the net exports of goods and services. 
(iii) plus the government's budget deficit. 
(iv) minus foreign portfolio investment.
In an open economy, national saving equals domestic investment
 
A. Minus the net exports of goods and services.
B. Plus the government's budget deficit.
C. Minus foreign portfolio investment.
D. Plus the net outflow of capital abroad.

In the market for foreign-currency exchange in the open-economy macroeconomic model, which of the following does the amount of net capital outflow represent?
a.
the quantity of dollars supplied for the purpose of selling assets domestically
b.
the quantity of dollars supplied for the purpose of buying assets abroad
c.
the quantity of dollars demanded for the purpose of buying Canadian net exports of goods and services
d.
the quantity of dollars demanded for the purpose of importing foreign goods and services