4. Problem 4 An open economy interacts with the rest of the world through involvement in world financial markets, and also world markets for goods and services. Despite the fact that this involvement often results in an imbalance in these markets, the following identity must hold: Net Capital Out flow = Net Exports That is, any transaction that affects the left side of this equation must also affect the right side. The following problem provides a scenario that illustrates why this identity must remain true. Suppose you own a big box retailer in the United States, where there will soon be high demand for the brand new PlayNation Vital video game console. Anticipating this trend, you spend $10,000 to build out your inventory of the console, which is manufactured by Zboz, a Japanese company, in Japan. Determine the effects of this transaction on exports, imports, and net exports in the U.5. economy, and enter your results in the following table. If the direction of change is "No change, " enter "0" in the Magnitude of Change column. Hint: The magnitude of change should always be positive, regardless of the direction of change. Magnitude of Change Direction of Change (Dollars) Exports No change Imports Increase 10.000 Net Exports Decrease -10,000 Because of the identity equation that relates to net exports, the decrease * in U.S. net exports is matched by an increase * in U.S. net capital outflow. Which of the following is an example of how the United States might be affected in this scenario? Check all that apply. Zboz exchanges the $10,000 for yen at the local bank, which then uses the dollars to purchase U.S. bonds. Zboz purchases $10,000 worth of U.S. bonds. O Zboz purchases $10,000 worth of stock in a U.S. company