1. 1. How are you on the demand side of
the loanable funds market?
2. How are you the supply side of the
loanable funds market?
3. Calculate the real interest rate if the
CPI is 4% and the interest rate is 6%
4. How would your behavior change if
the interest rate increased, but CPI
stayed constant?
2. Exports $100B
to India &
Japan
Imports $50 B
from India &
Japan
Net Exports
Current
Account
Capital
Account
NCO?
Imports $75B to
China & Japan
Exports $25B to
China and
Japan
Net Exports
Current
Account
Capital Account
NCO?
NCO = purchases of F. Assets by locals – purchases of domestic assets by foreigners
Exports $75B
to India &
China
Imports $75B
from India &
China
Net Exports
Current
Account
Capital
Account
NCO?
11. US firms increase direct
investment in a poor country such
as Guatemala?
Loanable funds in US S or D?
What happens to NCO?
How does that effect the US $
exchange rate in the Forex
market?
13. Balance of payments
Net importer/Exporter
(explanation of why) (oil)
NCO
Trading blocs
5 export goods
3 imported goods
Exchange rate between US, Euro,
Yen
Graph: 10 year history of exchange
rate between US Dollar
Cite your source
Choose 1:
Poster
Pamphlet
Essay
Website