If the United States saves $1,000 billion and U.S. net capital outflow is -$300 billion, U.S. domestic investment is a. $1,000 billion b. $300 billion c. $700 billion d. -$300 billion e. $1,300 billion

If the United States saves $1,000 billion and U.S. net capital outflow is -$300 billion, U.S. domestic investment is a. $1,000 billion b. $300 billion c. $700 billion d. -$300 billion e. $1,300 billion

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: 8. In a magical kingdom, the leakages were equal to 100 in 2019. In the same year, government…

A: Leakages means the decrease in production level due to rise in economic variable . And such…

Q: If a country is an international borrower, then its domestic real interested rate is _________ the…

A: Answer in step 2.

Q: International financial capital flows into the United States come from: а. income that is not spent…

A: International financial capital flows into the United States is the money invested into the United…

Q: Table 10.2. International Investment Position of the United States U.S. assets abroad U.S.…

A: Given the following data: U.S. assets abroad U.S. government assets $800 billion U.S.…

Q: 1. In each scenario below: Draw a loanable funds market diagram to show a small open economy with a…

A: The loanable funds market, also known as the credit market or capital market, is a conceptual…

Q: Assume that the following details apply to the U.S. economy: Government budget deficit: $150…

A: G - T = Government budget deficit = $150 billion. S = Domestic Savings = $2,000 billion I = Domestic…

Q: A small open economy, Nevaco's real GDP is $100,000, the MPS is 0.20, and the marginal propensity to…

A: Marginal propensity to consume(MPC) tells how much consumption changes due to $1 change in…

Q: Suppose in a small open economy, real GDP is $500 billion, consumption is $300 billion, investment…

A: real GDP is $500 billion, consumption is $300 billion, investment is $120 billion, government…

Q: real interest rate A B C S+T-G I I,S,X 18. Suppose, everything else is unchanged, the world interest…

A: International trade includes exchanging all the resources in return for some monetary value in the…

Q: Q# 01: See the below diagram and explain, when in the market for loanable fund, real interest rate…

A: There exists inverse relation between supply of loanable funds and real interest rates as seen from…

Q: tax credit policy on interest rate, loanable funds, net capital outflow, real exchange rate and…

A: The interest rate is controlled by the market forces, demand, and supply with respect to the cash…

Q: At the end of 2016, foreign investors owned over $8 trillion more of U.S. assets than U.S. investors…

A: A country is said to be a net debtor when it faces relatively more foreign liabilities than foreign…

Q: 10. If net foreign investments are -250, what are the net exports? Can you draw any conclusions…

A: Foreign investment refers to the capital flow from one country to another, this grants the foreign…

Q: The diagram to the right represents desired saving and desired investment in a domestic economy. Net…

A: Net exports refer to the difference between a country's total exports and total imports of goods and…

Q: Use Figure 5.1 below to answer the next three questions: real interest rate A B C S+T-G I I,S,X 17.…

A: The Equilibrium interest rate is determined where the investment and saving are equal. The saving…

Q: If the National bank of Kazakhstan undertakes a policy to raise interest rates, capital flows…

A: Basics:- When interest rate rises, the capital outflow of the country decreases as the home country…

Q: -How is the balance of payments linked to national saving and investment? Explain.

A: The method used to monitor all the international transactions of a country, in a given period of…

Q: State whether each of the following events involves a financial flow to the Mexican economy or a…

A: Before we answer the above question, let us first understand some key concepts regarding financial…

Q: In an open economy, investment can be greater than savings if there is a (Click to select) (Click to…

A: In an open economy, aggregate expenditure is the sum of consumption (C), investment (I), government…

Q: 23. Suppose the U.S. is operating in an open economy. Suddenly, there is a large decrease in…

A: In an economy, consumer expenditure refers to the total amount of money spent by individuals and…

Q: private domestic savings = $1220, the trade deficit = $90. Find private %3D %3D

A: Gross private domestic investment, or GPDI, is a measure of the amount of money that domestic…

Q: Consider a hypothetical open economy. The following table presents data on the relationship between…

A: Given information:- Real Interest Rate National Saving Domestic Investment Net Capital…

Q: Consider a hypothetical open economy. The following table presents data on the relationship between…

Q: In a small open economy if domestic private saving equals $50 billion, government saving equals-$20…

A: The trade balance is the total of a nation's products exported and imported minus any money…

Q: Which of the following would be included in the financial account of the U.S. balance of payments?…

A: The financial account, also known as the financial account of the balance of payments, is a…

Q: • Consider the long-run model of a small open economy with perfect capital mobility. araning from an…

A: An economy that in turn participates in international trade, but is considered to be small enough as…

Q: If U.S. net exports are negative, then net capital outflow is A. negative, so American…

A: The objective of the question is to understand the relationship between net exports and net capital…

Q: Figure 1: US Saving, Investment, and Net Capital Outflow (NCO) 25.00% 20.00% 15.00% 10.00% 5.00%…

A: Capital inflow: - Capital inflow means the inflow of foreign capital into the country.

Q: Consider a hypothetical open economy. The following table presents data on the relationship between…

A: The loanable fund market refers to the form of a market where there is an interaction of borrowers…

Q: Consider a hypothetical open economy. The following table presents data on the relationship between…

A: A balanced budget (particularly that of an organization) is a budget wherein salaries are identical…

Q: If Canadian citizens decide to save a larger fraction of their incomes, which statement would best…

A: Answer b) The real interest rate decrease, the real exchange rate for dollar depreciates and…

Q: Which of the following income of a foreign corporation is not subject to the regular U.S. corporate…

A: Answer- D. FIRPTA profits are exempt from the standard corporate income tax rates in the United…

Q: Because of the relationship between net capital outflow and net exports, the level of net capital…

A: The balance of trade is the difference between the value of a country's exports and the value of its…

Q: 6. Define the terms "net exports" and "net capital outflow". How are the two variables related in an…

A: Answer: Introduction: Net export: it refers to the difference between export and imports of a…

Q: “Is FDI a Good Sign for any country to Raise its capital” Justify the statement. Discuss the Reasons…

A: FDI is foreign direct investment.It is good sign for a country to increase its capital. With…

Q: The major economic functions of the interest rate are O to provide market incentives for saving and…

A: The major economic functions of the interest rate are to provide market incentives for savings and…

Q: D. - $489 billion.

Q: Because of the increased global unrest, citizens in a small open economy are no longer travelling…

A: A small open economy is an economy that takes part in international trade, yet is small enough…

Q: The current account includes changes in a. net exports, net foreign investment income, and import…

A: Trade means the exports and imports of goods and services. It means the net exports are positive if…

Q: Suppose that the government deficit is 20, interest on the government debt is 15, taxes are 55,…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: . The government has proposed Rs1,289 billion for the defence budget for the year 2020-21, 5.1%…

A: If the government cut the defence budget keeping the other budget constant, the overall government…

Q: 1. The government of country X is committed to fighting corruption and providing tax holidays for…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: c

A: Net export refers the difference between the values of a country's exports and the values of a…

Q: Based on the table below, which of the following is likely to be true? a. From the first period to…

A: I the mentioned question, we have to answer as per the data present in the table. Lets discuss one…

Question

If the United States saves $1,000 billion and U.S. net capital outflow is -$300 billion, U.S. domestic investment is
a. $1,000 billion
b. $300 billion
c. $700 billion
d. -$300 billion
e. $1,300 billion

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Define investment

VIEW

Step 2: Calculation of domestic investment

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Consider a hypothetical open economy. The following table presents data on the relationship between various real interest rates and national saving, domestic investment, and net capital outflow in this economy, where the currency is the U.S. dollar. Assume that the economy is currently experiencing a balanced government budget. Real Interest Rate National Saving Domestic Investment Net Capital Outflow (Percent) (Billions of dollars) (Billions of dollars) (Billions of dollars) 7 60 25 -10 6 55 30 -5 5 50 35 0 4 45 40 5 3 40 45 10 2 35 50 15 Given the information in the preceding table, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange points (square symbol) to plot the supply of loanable funds. Finally, use the black point (cross symbol) to indicate the equilibrium in this market. On the following graph, plot the relationship between the real…
don't use Al bot or chat GPT otherwise downvote.correct answer will get instant upvote
Suppose that the government decides to cut spending. In a three graphs diagram, show theimpact of this policy on real interest rate, national saving, investment, net capital outflows,demand for currency (NX), and supply of currency? Will the currency appreciate ordepreciate?
10.Suppose in a small open economy, real GDP is $500 billion, consumption is $300 billion, investment is $120 billion, government purchases equal $100 billion, exports are $80 billion, and imports are $100 billion. whether this small country’s interest rate, rE, is above, below, or equal to the world interest rate, rw? Is S>I or I>S, or S=I in this economy? Using the saving-investment diagram for a small open economy, show your answer on the graph. Clearly mark both rE and rw and trade deficit/surplus (or capital inflow/outflow).
QUESTION 5 Which of the following is associated with a trade surplus? a. Domestic investment exceeds domestic savings. b. Foreign savings is positive. Oc. Domestic savings exceeds domestic investment. Od. Foreign investment is negative. QUESTION 6 Which of the following is considered a capital inflow? Oa. A U.S. citizen's repayment of a loan from a foreign bank Ob.A sale of U.S. financial assets to a foreign buyer Oc. A purchase of foreign financial assets by a U.S. buyer d. A loan from a U.S. bank to a foreign borrower
a Figure 1 shows the exogenous world interest rate (r*) determines the level of investment (I) and the difference between saving (S) and investment determines net capital outflow and net exports (NX) for a small open economy. What would happen to I, NX and S if: i. The government of this small open economy uses expansionary fiscal policy. ii. The government of other countries (abroad) uses contractionary fiscal policy. b Suppose the price of a cup of tea is Rs.50 in Pakistan and $2 in USA, the value of nominal exchange rate is $0.006364 per PKR. Calculate the value of real exchange rate (ε) and interprete its meaning. Also, discuss the relationship between net exports (NX) and real exchange rate. c Briefly explain the theory of purchasing power parity (PPP) with the help of example.
1.Determine the initial effect from the following transactions on the Malaysia net exports (exports and imports) or net capital outflow (purchase of foreign assets by locals and purchase of domestic assets by foreigners). a. A Japanese spending his time and money having a vacation in Singapore. b. Megan, an American buying a pair of shoes from Bata shoes made in Malaysia.
4 G) Suppose that parliament passes an investment tax credit, which subsidizes domestic investment. How does this policy affect national saving, domestic investment, net capital outflow, the interest rate, the exchange rate, and the trade balance?
Suppose a country's net exports are $400 billion, income receipts on investments are $780 billion, and income payments on investments are $1,200 billion. Suppose unilateral transfers are $250 billion. If all international transactions are recorded accurately in the balance of payments, what is the value of the financial account? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a -$20 billion b d -$270 billion $270 billion Need information on the flows of funds for real and financial investments to answer. Your answer
Answer ASAP. Will give you a positive rating.
i will 10 upvotes no chat gpt
14. Consider a country in the two-period analysis of trade imbalances experiencing a trade deficit in period I and no GNP growth between the two periods. Assuming that the country finances its trade deficits through borrowing in period I and repaying the entire loan in period 2 and the extra funds in period I are not directed into domestic investment, which of the following will be observed? a. The average standard of living in the country in period 2 will decline. b. The average standard of living in the country in period I will decline. c. The average standard of living in the country in period 2 will improve. d. The average standard of living in the country in period I will remain unaffected. e. The average standard of living in the country will remain stable over the two periods.