Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN: 9781337091985
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 13, Problem 2CQQ
To determine
Exchange rate between Paris and New York.
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In an open economy, national saving equals domesticinvestmenta. plus the net outflow of capital abroad.b. minus the net exports of goods and services.
c. plus the government’s budget deficit.d. minus foreign portfolio investment.
In a small open economy, if domestic investment equals $70 billion, domestic private saving equals $40 billion, and government saving equals $30 billion, then the trade balance is:
a. -$30 billion
b. $0 billion
c. $30 billion
d. $40 billion
In an open economy, national saving equalsdomestic investmenta. plus the government’s budget deficit.b. minus the net exports of goods and services.c. plus the net outflow of capital.d. minus foreign portfolio investment
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Brief Principles of Macroeconomics (MindTap Course List)
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- Suppose that national saving is $1456 billion, investment is $1945 billion, and private saving is $1590 billion. How much is the current account balance? A. $221 billion. B. - $221 billion. C. $489 billion. D. - $489 billion.arrow_forwardDiscuss the role of budget surpluses and trade surpluses in national saving and investmentarrow_forwardHolding other things constant, an increase in anation’s interest rate reducesa. national saving and domestic investment.b. national saving and the net capital outflow.c. domestic investment and the net capital outflow.d. national saving onlyarrow_forward
- The value of net exports equals the value of A. national saving – domestic investment. B. national saving – net capital outflow. C. public saving. D. national saving.arrow_forwardSelect all that are true given an increase in foreign investment from the domestic economy: A. Domestic economic growth (GDP) increases, ceteris paribus B. Investment from the domestic economy to the foreign economy decreases C. The domestic currency depreciatesarrow_forwardWhich of the following would be U.S. foreign direct investment? A. A U.S. canning factory opens a plant in Ecuador. B. A Bolivian bank buys U.S. corporate bonds. C. A Polish company opens a shipbuilding plant in the United States. D. A U.S. bank buys Bolivian corporate bonds.arrow_forward
- A country’s investment is 8, its government spends 10 and raises 9 in taxes, and its current account is -2. Find the country’s private saving. Find the country’s public saving. How much net investment does the country receive from the rest of the world?arrow_forwardSuppose a country, Macroland, doesn't trade with other countries. Its GDP is $20 billion. Its government purchases $3 billion worth of goods and services each year, collects $3 billion in taxes, and provides $1 billion in transfer payments to households. Private saving in Macroland is $4 billion. What is investment in Macroland? Question 16 options: $1 billion $3 billion $2 billion $4 billionarrow_forwardInternational financial capital flows into the United States come from: а. income that is not spent in the US. b. savings from the rest of the world. С. the savings of US households. d. the savings of the US government.arrow_forward
- How does each of the following changes affect the real gross domestic product and price level of an open economy in the short run? Explain. The depreciation of the country’s currency in the foreign exchange market.arrow_forwardSuppose that GDP is equal to 1,000, national saving is equal to 200, the current account deficit is equal to 100, and the government budget deficit is equal to 50. Private savings must equal （ ）arrow_forwardA country's investment can be financed by ________. a. a government budget surplus b. national saving and foreign borrowing c. only saving by households and firms d. making exports exceed importsarrow_forward
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