Show transcribed image text Net capital outflow and net exports An open economy interacts with the rest of the world through its involvement in world markets for goods and services and world financial markets. Although it can often result in an imbalance in these markets, the following identity must remain true: In other words, If a transaction directly affects the left side of this equation, then It must also affect the right side. The following problem will help you understand why this Identity must hold. Suppose you are a fashion designer Living In the United States, and a trendy boutique in Bangkok just purchased your entire inventory for THB 80,000. Determine the effects of this transaction on exports, imports, and net exports in the U.S. economy, and enter your results in the following table. If the direction of change is 'No change,'' enter ''0'' in the Magnitude of Change column. Hint: The magnitude of change should always be positive, regardless of the direction of change. Because of the identity equation that relates to net exports, the in U.S. net exports Is matched by in U.S. net capital outflow. Which of the following Is an example of how the United States might be affected in this scenario? Check all that apply. You store the Thai baht in your safety deposit box at home. You purchase THB 48,000 worth of stock in a Thai corporation and THB 32,000 worth of Thai bonds. You exchange the THB 80,000 for dollars at your local bank, which then uses the foreign currency to purchase stock in a Thai corporation.