Asked by Trenton Henderson on May 05, 2024
Verified
A country recently had GDP of $1,200 billion. Its consumption expenditures were $700 billion, its government spent $200 billion, and it had domestic investment of $175 billion. What was the value of this country's net capital outflow? Show your work.
Net Capital Outflow
The net flow of funds invested abroad by a country, over a specific time period, typically calculated as the difference between domestic savings and investment.
GDP
Gross Domestic Product (GDP) is the total monetary value of all goods and services produced within a country's borders in a specific time period, serving as a broad indicator of economic health.
Consumption Expenditures
The total amount spent by consumers on goods and services.
- Evaluate trade balances, net exports, and net capital outflows based on available data.
- Estimate the value of domestic investment by considering national savings and net capital outflow.
Verified Answer
RA
Rashawn AmuraMay 11, 2024
Final Answer :
Y = C + I + G + NX
$1,200 billion = $700 billion + $175 billion + $200 billion + NX
$125 billion = NX
NX = NCO = $125 billion
$1,200 billion = $700 billion + $175 billion + $200 billion + NX
$125 billion = NX
NX = NCO = $125 billion
Learning Objectives
- Evaluate trade balances, net exports, and net capital outflows based on available data.
- Estimate the value of domestic investment by considering national savings and net capital outflow.