An open economy interacts with the rest of the world through its involvement in world markets for goods and services and world financial markets. Although it can often result in an imbalance in these markets, the following identity must remain true: Net Capital Outflow Net Exports In other words, if a transaction directly affects the left side of this equation, then it must also affect the right side. The following problem will help you understand why this identity must hold. Suppose you are a statistician living in Canada, and you just sold your newest sales forecasting model to a company In South Africa for R75,000. Determine the effects of this transaction on exports, imports, and net exports in the Canadian 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 (Rand) Exports Imports Net Export Explanation: Open y Because of the identity equation that relates net capital outflow to net exports, the v in Canadian net exports is matched by in Canadian net capital outflow. Which of the following is an example of how net capital outflow from Canada might be affected in this scenario? Check all that apply. You buy R75,000 worth of South African bonds. You exchange the R75,000 for dollars at your local bank, which then uses the foreign currency to purchase South African bonds. You purchase R75,000 worth of stock in a South African corporation