Gamecube Game System
Oct 03
2011
2011
Comments Off
Aplia macroeconomics help?
A 14-year-old girl living in Brisbane, Queensland, purchases a new GameCube game system at Target for $150. The game is manufactured by the Nintendo Co. in Tokyo. Target pays Nintendo $100 for the game system. The other $50 covers the cost of workers, rent, and profit for Target.
Nintendo exchanges the $100 at the First National Bank of Tokyo for 8,000 yen. The First National Bank of Tokyo loans the $100 to Mitsubishi, which uses it (and a lot of additional money) to expand its automobile manufacturing facility in South Australia.
Assume that Australian trade with Japan was in balance prior to the above transactions. How do the transactions affect the balance of trade?
A. They cause a trade deficit in Australia.
B. They have no effect on the trade balance in Australia.
C. They cause an increase in net exports in Australia.
D. They cause a trade surplus in Australia.
A, B, C or D?
Thanks
“A” is right one.
Since girl purchases foreign produced good it means that she uses imported goods thus increasing import and consequently rising trade deficit.
Classic Game Room – NINTENDO GAMECUBE console review
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