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2. Use your knowledge of the relationship between net exports and capital flows to fill in the missing blanks. Capital Capital Y C H G

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2. Use your knowledge of the relationship between net exports and capital flows to fill in the missing blanks. Capital Capital Y C H G NFI Inflows Outflows 1,000 900 50 100 200 1,000 200 200 100 200 2,000 300 200 100 300 1,500 1,000 200 150 504. Watch the video "Living with nearly 100% inflation" by Vice news on Youtube and answer the following questions. a. Provide an example from the video of how money's use as a medium of exchange is being weakened by the inflation in Argentina. b. Provide an example of menu costs from the video. c. Inflation can affect different income groups differently. Which group do you think is most adversely affected by the inflation in Argentina: low income, middle income or high income. Explain, giving a specific example from the video.5. Multiple Choice i. Investment is best described as being g positively related to the real interest rate b. positively related to the nominal interest rate 0. negatively related to the real interest rate d. negatively related to the nominal interest rate ii. Which of the following represents a capital outow for the United States? a. A US. bank lends money to Argentina b. A Japanese pension fund buys US. Treasury bonds c. A Colombian family buys real estate in Miami (I. All of the above 6a. Use a savings-investment graph to show a country with positive net foreign investment. Assume a small country with perfect capital markets. Label all axes and curves. Use your graph to predict the effect of the following on net exports (increase, decrease or no effect) b. Citizens in the country decrease the fraction of their income that is devoted to savings 0. Investment in the country decreases because of an unfavorable political climate d. An increase in the world interest rate

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