Question

Consider the following cases and indicate for each case the direction and amount of changes in NX and NCO for the U.S. (e.g. NX decreases by $2, NCO increases by $3, etc.). Please circle your final numerical answers and explain how you arrived at the numerical answers. a. The U.S. government uses 500,000 U.S. dollar’s worth of previously obtained Chinese Yuan to buy 500,000 U.S. dollar’s worth of N-95 masks from a Chinese company.

Answer 1

a)

NX increase by$500,000

NCO decrease by $500,000

b)

NX increase by $500,000

NCO decrease by $500,000

c)

NX increase by 1 million

NCO first increase then decrease by 1 million

Step-by-step explanation:

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