Chapter 12 Open-Economy Macroeconomics

Chapter 12 Open-Economy Macroeconomics - Chapter XII...

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Chapter XII Open-Economy Macroeconomics: Basic Concepts In this chapter, look for the answers to these questions: How are international flows of goods and assets related? What’s the difference between the real and nominal exchange rate? Introduction One of the Ten Principles of Economics from Chapter 1: Trade can make everyone better off. This chapter introduces basic concepts of international macroeconomics: The trade balance (trade deficits, surpluses) International flows of assets Exchange rates Closed vs. Open Economies A closed economy does not interact with other economies in the world. An open economy interacts freely with other economies around the world. 1. It buys and sells goods and services in world product markets. 2. It buys and sells capital assets in world financial markets. 1. Exports : domestically-produced goods and services sold abroad Imports : foreign-produced goods and services sold domestically Net exports (NX) , aka the
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This note was uploaded on 01/18/2012 for the course ECON 102 taught by Professor ? during the Fall '08 term at Waterloo.

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Chapter 12 Open-Economy Macroeconomics - Chapter XII...

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