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