Question 18 1 pts Germany is considered the leading economy of the Eurozone. In

Q: Question 18 1 pts Germany is considered the leading economy of the Eurozone. In

Option (1). Trade balance = X - IM = 600 - 300 = 300 > 0, therefore there is a trade surplus. A trade surplus is equivalent to Net capital outflow (NCO), because, by the two-gap hypothesis, Savings - Investment = X - IM = NCO When X > IM, Saving > Investment, therefore there is a net outflow of capital outside the country, signifying the country can be a net lender.

ID: 2440984 • Letter: Q

Question

Question 18 1 pts Germany is considered the leading economy of the Eurozone. In 2006, it has a trade surplus with China and with the Southern countries of the Eurozone (Greece, Portugal, Spain). Germany economy is characterized by: C-100+ (4/5) YD: I-200, G-400, X- 600, IM-300; T-600 Reference: 13 Can Germany's economy, taken as a whole in 2006, be a net lender to other countries? O yes, because it has a trade surplus O yes, because it has a trade deficit O no, because it has a trade surplus O no, because it has a trade deficit

Explanation / Answer

Option (1).

Trade balance = X - IM = 600 - 300 = 300 > 0, therefore there is a trade surplus.

A trade surplus is equivalent to Net capital outflow (NCO), because, by the two-gap hypothesis,

Savings - Investment = X - IM = NCO

When X > IM, Saving > Investment, therefore there is a net outflow of capital outside the country, signifying the country can be a net lender.

Navigate

Question 18 1 pts Figure 3-5 Hosne\'s Production Possibilities Frontier Merve\'s

Question 18 1 pts Sunflower hybrids resulting from crosses between wild sunflowe

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.

Question 18 1 pts Germany is considered the leading economy of the Eurozone. In

Question

Explanation / Answer

Related Questions

Navigate