Course: Econ 102-51
Prof: Nural Aman
Name: Liwen Chen
1) "A balance of trade deficit must always be offset by net capital inflows from
abroad." Agree or disagree with this statement and explain.
2) Suppose a Japanese firm buys a 1 year treasury bill with a face value of $10,000
today for $9400. If the value of the dollar declined from 90 to 80 yen during the year,
what rate of return does the Japanese firm earn on its investment?