Asked by Mackenzie Thorne on Jul 11, 2024
Verified
A department store chain in Japan uses yen to purchase 500,000 U.S. dollars from a U.S. bank. It then uses these dollars to buy DVDs from a U.S. filmmaker. As a result of these transactions:
A. By how much and in what direction did U.S. net exports change?
B. By how much and in which direction did U.S. net capital outflow change?
Net Capital Outflow
The difference between the purchase of foreign assets by domestic residents and the purchase of domestic assets by foreigners in a given period, reflecting the international flow of capital.
Net Exports
The balance achieved by subtracting a nation's total import value from its total export value.
- Investigate the determinants impacting net exports and the movement of net capital.
- Analyze how currency exchanges and investment influence net capital outflow.
Verified Answer
JE
Jamie EversonJul 12, 2024
Final Answer :
A. U.S. net exports rose by $500,000.
B. U.S. net capital outflow rose by $500,000.
B. U.S. net capital outflow rose by $500,000.
Learning Objectives
- Investigate the determinants impacting net exports and the movement of net capital.
- Analyze how currency exchanges and investment influence net capital outflow.