Explain relationship in net capital outflow-trade balance


We have established a relationship between net capital outflow (NCO) and the trade balance (net exports). During this period, is capital generally flowing into or out of your country (i.e., is your country a net borrower or lender in international capital markets)? What does this imply about your country's rate of saving vs. investment, i.e., does your country save more than it invests domestically, or vice versa?

During the 2008 recession, many investors became concerned about the safety of international assets compared to US assets. What effect should this have on NCO in your country? How did NCO in your country change during the years 2007-2010?

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Microeconomics: Explain relationship in net capital outflow-trade balance
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