2008SPRING_HW1 - What happens to US and Japanese net...

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ECO 320L - HW1 Due January 31, 3008 All of the following questions are required. Questions for Review: Chapter 2, #14. Problems: Chapter 2, #1, 5, 9, 10, 11, and 12. Chapter 3, #1, 3, 5, and 9. Questions: Q1: What is the difference between nominal and real economic variables? Why do economists tend to concentrate on changes in real magnitudes? Q2: Suppose that Bill Gates sells a copy of the Windows to a Japanese company for 5000 yen.
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Unformatted text preview: What happens to US and Japanese net exports and current account balances as a result of this transaction under the following scenarios about how Mr. Gates uses this money? Mr. Gates a. stuffs the 5000 yen in his mattress. b. buys stocks of a Japanese company c. buys Japanese government bonds d. exchanges for US dollars at a local bank e. buys a Sony Walkman (a Japanese product) for 5000 Yen...
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This note was uploaded on 02/04/2011 for the course ECON 320L taught by Professor Kuruscu during the Fall '08 term at University of Texas at Austin.

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