Why and how net exports and net capital flow are related to each other? If Saudi Arabia experience trade deficit does it necessarily create trouble for a county’s economic growth? Using Purchasing-Power Parity Theory, how nominal exchange rates of a country are determined in relation to other countries?

Principles of Economics (MindTap Course List)
8th Edition
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter31: Open-Economy Macroeconomics: Basic Concepts
Section31.2: The Price For International transaction: Real And Nominal Exchange Rate
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Why and how net exports and net capital flow are related to each other? If Saudi Arabia experience trade deficit does it necessarily create trouble for a county’s economic growth? Using Purchasing-Power Parity Theory, how nominal exchange rates of a country are determined in relation to other countries?

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