曼昆经济学原理第五版答案英文ch29.doc

Chapter 29 — OPEN-ECONOMY MACROECONOMICS: BASIC CONCEPTS 15OPEN-ECONOMY MACROECONOMICS: BASIC CONCEPTS 29WHAT’S NEW:There is a new FYI box on “The Euro” and a new In the News box on “It’s the 21st Century, Do You Know Where Your Capital Is?” A new Case Study on “The Hamburger Standard” has also been added.LEARNING OBJECTIVES:By the end of this chapter, students should understand:Ø how net exports measure the international flow of goods and services.Ø how net foreign investment measures the international flow of capital.Ø why net exports must always equal net foreigh investment.Ø how saving, domestic investment, and net foreign investment are related.Ø the meaning of the nominal exchange rate and the real exchange rate.Ø purchasing-power parity as a theory of how exchange rates are determined.KEY POINTS:1. Net exports are the value of domestic goods and services sold abroad minus the value of foreign goods and services sold domestically. Net foreign investment is the acquisition of foreign assets by domestic residents minus the acquisition of domestic assets by foreigners. Because every international transaction involves an exchange of an asset for a good or service, an economy’s net foreign investment always equals its net exports.2. An economy’s saving can be used to finance investment at home or buy assets abroad. Thus, national saving equals domestic investment plus net foreign investment.3. The nominal exchange rate is the relative price of the currency of two countries, and the real exchange rate is the relative price of the goods and services of two countries. When the nominal exchange rate changes so that each dollar buys more foreign currency, the dollar is said to appreciate or strengthen. When the nominal exchange rate changes so that each dollar buys less foreign currency, the dollar is said to depreciate or weaken.4. According to the theory of purchasing-power parity, a dollar (or a unit of any other currency) should be able to buy the same quantity of goods in all countries. This theory implies that the nominal exchange rate between the currencies of two countries should reflect the price levels in those two countries. As a result, countries with relatively high inflation should have depreciating currencies, and countries with relatively low inflation should have appreciating currencies.CHAPTER OUTLINE:I. We will no longer be assuming that the economy is a closed economy.A. Definition of Closed Economy: an economy that does not interact with other economies in the world.B. Definition of Open Economy: an economy that interacts freely with other economies around the world.II. The International Flows of Goods and CapitalA. The Flow of Goods: Exports, Imports, and Net Exports1. Definition of Exports: goods and services that are produced domestically and sold abroad.2. Definition of Imports: goods and services that are produced abroad and sold domestically. Point out foreign products that students are likely to buy.3. Definition of Net Exports: the value of a nation’s exports minus the value of its imports, also called the trade balance.4. Definition of Trade Balance: the value of a nation’s exports minus the value of its imports, also called net exports.Make it clear that there are no “good” or “bad” international trade balances, just as there are no good or bad trade balances between states or between a household and a local merchant. Trade simply allows individuals to consume more than they would be able to in the absence of trade. This will be difficult for many students to accept, as they have been given the impression that the U.S. trade deficit is a “problem” from politicians and the media.5. Definition of Trade Surplus: an excess of exports over imports.6. Definition of Trade Deficit: an excess of imports over exports.7. Definition of Balanced Trade: a situation in which exports equal imports.Point out to students that a trade surplus implies a positive level of net exports, a trade deficit means that net exports are negative, and balanced trade occurs when net exports are equal to zero. While this will likely be obvious to most students, some will benefit if you review this.8. Factors that Influence a Country’s Exports, Imports, and Net Exportsa. The tastes of consumers for domestic and foreign goods.b. The prices of goods at home and abroad.c. The exchange rates at which people can use domestic currency to buy foreign currencies.d. The incomes of consumers at home and abroad.e. The cost of transporting goods from country to country.f. The policies of the government toward international trade.9. Case Study: The Increasing Openness of the U.S. EconomyFigure 29-1a. Figure 29-1 shows the total value of exports and imports (expressed as a percentage of GDP) for the Uni。