ECO CH 18 - Closed economy-an economy that does not...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Closed economy-an economy that does not interact with other economies Open economy-an economy that interacts freely with other economies around the world. Exports-domestically produced goods and services that are sold abroad Imports-foreign-produced goods and services that are sold domestically Net Exports=Exports-Imports, Also called Trade Balance Trade Surplus- net exports are positive, exports are greater than imports, indicating that the country sells more goods and services abroad than it buys from other countries. Trade Deficit- net exports are negative, exports are less than imports, indicating that the country sells fewer goods and services abroad than it buys from other countries. Balanced Trade- net exports are zero; its exports and imports are exactly equal Net Capital Outflow (foreign investment)- Purchase of foreign assets by domestic residents - Purchase of domestic assets by foreigners. Foreign direct investment- McDonald’s opens up a fast- food outlet in Russia
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 08/16/2010 for the course ECO 2013 taught by Professor Zhou during the Spring '08 term at Texas San Antonio.

Page1 / 2

ECO CH 18 - Closed economy-an economy that does not...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online