Net capital outflow and net exports
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 fashion designer living in the United States, and a trendy boutique in Bangkok just purchased your entire inventory for THB 90,000 Determine the effects of this transaction on exports, imports, and net exports in the U.S. economy, and enter your results in the following table. If the direction of change is "No change," enter "O" in the Magnitude of Change column. Hint: The magnitude of change should always be positive, regardless of the direction of change. Magnitude of Change (Baht) Direction of Change Exports Imports Net Exports in U.S. net capital Because of the identity equation that relates to net exports, the outflow. Which of the following is an example of how the United States might be affected in this scenario? Check a in U.S. net exports is matched by an increase You exchange the THB 90,000 for dollars at your local bank, which then uses the foreign currency to pu a decrease a Thai corporation O You store the Thai baht in your safety deposit box at home. You purchase THB 54,000 worth of stock in a Thai corporation and THB 36,000 worth of Thai bonds 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 fashion designer living in the United States, and a trendy boutique in Bangkok just purchased your entire inventory for THB 90,000 Determine the effects of this transaction on exports, imports, and net exports in the U.S. economy, and enter your results in the following table. If the direction of change is "No change," enter "O" in the Magnitude of Change column. Hint: The magnitude of change should always be positive, regardless of the direction of change. Magnitude of Change (Baht) Direction of Change Exports Imports Net Exports in U.S. net capital Because of the identity equation that relates to net exports, the outflow. Which of the following is an example of how the United States might be affected in this scenario? Check a in U.S. net exports is matched by an increase You exchange the THB 90,000 for dollars at your local bank, which then uses the foreign currency to pu a decrease a Thai corporation O You store the Thai baht in your safety deposit box at home. You purchase THB 54,000 worth of stock in a Thai corporation and THB 36,000 worth of Thai bonds
