Post your 3 favorite margin notes from this chapter. Why did you highlight and comment on these particular points in the text? (I know some of you don’t take notes as you read – just jot down three things that you found interesting in the chapter and why.)
- I found it important that in an open economy a nation’s saving must equal its domestic investment plus its net capital outflow. In a closed economy, saving is equal to investment, but in an open economy it is obviously a-lot more complex.
2. I also found it important that purchasing-power parity is a theory of exchange rates. Where a unit of any given currency should be able to buy the same quantity of goods in all countries
3.Another thing that I found is that the nominal exchange rate is the relative price of the currency of two countries, and the real exchange rate is the relative price of the goods and services of two countries.
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