Why are net exports and net capital outflow always equal?
Net exports and net capital outflow are always equal because every international transaction is an exchange. When a seller country transfers a good or service to a buyer country, the buyer country gives up some asset to pay for this good or service. The value of that asset equals the value of goods and services sold. Hence, the net value of goods and services sold by a country (NX) must equal the net value of assets acquired (NCO).
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Electra Bikes is an American brand with a global presence. Which of the following trade agreements allowed Electra Bikes to expand its business by opening a new market in Canada?
a.NAFTA b.The EU c.MERCOSUR d.ASEAN e.CAFTA
Workers with more human capital on average earn substantially higher pay than workers with less human capital in
a. most countries but not in the United States. b. the United States but not in most other countries. c. the United States and in most other countries. d. None of the above is correct; the evidence fails to indicate that human capital is a significant factor in determining earnings anywhere in the world.
An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
In the above figure, the inflationary gap can correctly be identified as
A. LRAS minus SRAS. B. AD1. C. the difference between 125 and 120. D. the difference between 12.2 trillion and 12 trillion.