ECO 1102 Chapter Notes - Chapter 12: Foreign Direct Investment, Open Economy, Canadian Dollar

• School: University of Ottawa
• Department: Economics
• Course: ECO 1102
• Professor: David Gray

Document Summary

Ways economies interact: buying + selling goods and services in world product markets and buying + selling capital assets such as stock and bonds in world financial markets. The flow of goods:exports, imports, and net exports. Exports making things domestically and selling them to foreign countries. Imports purchasing things from foreign countries that they"ve made in their countries. The flow of financial resources: net capital outflow. Those residents who are part of an open economy participate in the world market for goods and services as well as the world financial markets. Ex) buying a k car from toyota or buying k worth of stocks from toyota. Flow of goods vs flow of capital. Net capital outflow purchase of foreign assets by domestic residents minus the purchase of domestic assets by foreigners (cid:1840)(cid:1857)(cid:1872) (cid:1829)(cid:1853)(cid:1868)(cid:1872)(cid:1853)(cid:1864) (cid:1841)(cid:1873)(cid:1872)(cid:1858)(cid:1864)(cid:1867)(cid:1875)=(cid:1842)(cid:1873)(cid:1870)(cid:1855) (cid:1853)(cid:1871)(cid:1857) (cid:1867)(cid:1858) (cid:1832)(cid:1867)(cid:1870)(cid:1857)(cid:1859)(cid:1866) (cid:1871)(cid:1871)(cid:1857)(cid:1872)(cid:1871) (cid:1854)(cid:1877) (cid:1830)(cid:1867)(cid:1865)(cid:1857)(cid:1871)(cid:1872)(cid:1855) (cid:1844)(cid:1857)(cid:1871)(cid:1856)(cid:1857)(cid:1866)(cid:1872)(cid:1871) Foreign direct investment (fdi) a (canadian) owner actively manages the investment.