ECO 1102 Study Guide - Nineteen Eighty-Four, Money Supply, Barter

• School: University of Ottawa
• Department: Economics
• Course: ECO 1102
• Professor: All

Document Summary

Introduction to macroeconomics: nx = nco identity at all times. Review session winter 2012: suppose nx = x im = not zero international trade is balanced, and the exports are sufficient to pay for imports. Financial capital will flow neither in nor out. No need to do any trading of financial securities: nx = nco < 0, x lm < 0 the exports do not suffice to pay the import bill. The import bills paid but selling financial capital to foreign countries. The net importer receives cash to pay the import bill but the foreign country takes title of financial and this has a claim on the future in come of the usa. There is net capital inflow sucks out investment money from foreign countries: nx = nco > not 0. X lm > 0 exports are more than sufficient to pay the import bill. After the trade balance has been settled, there is come left over.