China is a large open economy with an extraordinarily high saving rate. If, as seems likely,...
- China is a large open economy with an extraordinarily high saving rate. If, as seems likely, there is a decrease in desired saving in the coming years, what effects should we expect to see on China's trade balance (net capital flow), domestic real interest rate, and actual levels of saving and investment?
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China is a large open economy with an extraordinarily high
saving rate. If, as seems likely,...
5. Consider a small open economy that is currently running a trade deficit. a. With the...
5. Consider a small open economy that is currently running a trade deficit. a. With the help of a graph, what would happen to the real interest rate, the trade deficit, and desired levels of saving and investment if government expenditures were to increase? b. With the help of another graph, what would happen to the real interest rate, the trade deficit, and desired levels of saving and investment if consumption expenditures were to decrease?
Consider two large open economies, the home economy and the foreign economy. In both countries th...
Can someone please explain?
Consider two large open economies, the home economy and the foreign economy. In both countries the following relationships hold Domestic Foreign Desired consumption, Cd-320 + 0.4(Y-T)-200rw. Desired investment, 150 200* Output, Y = 1.000 Taxes, T 200 Government purchases. G 275 Fr4800.4(YFr To 300r. For 225 300 For1,500 For-300 For 300 a. What is the equilibrium interest rate in the international capital market?(Enter your response as a decimal rounded to three places.) What are the equilibrium...
4. Show and describe what happens in a LARGE OPEN ECONOMY to consumption (C), real interest rates (r), domestic inv...
4. Show and describe what happens in a LARGE OPEN ECONOMY to consumption (C), real interest rates (r), domestic investment (I), domestic savings (S), net exports (NX), capital flow (CF), and the real exchange rate (E) when there is a decrease in government spending in the large open economy. Show all steps.
2. Consider a large open domestic economy with a financial account surplus. i. Draw a diagram sho...
2. Consider a large open domestic economy with a financial account surplus. i. Draw a diagram showing this situation (Your answer should include two graphs, one for the omestic economy and one for the foreign economy). (10 Points)- Note: Draw the two graphs side by side and clearly indicate the world interest rate as a single line going through both graphs. ii. What are the effects, in equilibrium, on the world real interest rate, domestic national saving, domestic investment, the...
8. In a small open economy, if the world real interest rate is above the rate...
8. In a small open economy, if the world real interest rate is above the rate at which national saving exceeds domestic investment, then there will be a trade _and net capital outflow. A) surplus; negative B) deficit; positive C) surplus, positive D) deficit; negative
In a large open economy, what is the source of the domestic supply of loanable funds?...
In a large open economy, what is the source of the domestic supply of loanable funds? A. Net capital outflow B. National saving and investment C. National saving D. Investment
1: what would happen to national saving, investment, trade balance interest rate, and real exchange rate...
1: what would happen to national saving, investment, trade balance interest rate, and real exchange rate in responding to an increase in tariff on imported cars by the domestic government? graphically explain with the help of large open economy 2: what do you mean by trade policies? it's argued that protectionist trade policy benefits only local producers whereas society on the average suffers from it, do you agree with the statement? graphically explain considering a model of small open economy?
31. Starting from a small open economy with balanced trade, if large foreign countries increase their domestic gover...
31. Starting from a small open economy with balanced trade, if large foreign countries increase their domestic government purchases, this policy will tend to increase: A) investment in the small open economy. B) saving in the small open economy. C) exports by the small open economy. D) imports by the small open economy.
14. Consider the open-economy loanable funds model with flexible prices and capital mobility. Suppose that the...
14. Consider the open-economy loanable funds model with flexible prices and capital mobility. Suppose that the world consists of a small open economy (we call this domestic) and the rest of the world (we call this foreign). Answer the following questions with the aid of figures where appropriate a. How does an increase in domestic government expenditure affect trade balance and real exchange rate? (2 points] b. How does an increase in foreign government expenditure affect the trade balance and...
6. A large open economy has desired national saving of sd 2000+ 1000-, and desired national...
6. A large open economy has desired national saving of sd 2000+ 1000-, and desired national investment of Id - 1500- 500/- he foreign economy has desired national saving of sfor 1200+ 1000.", and desired national investment of or 2000-500-w, ) (5 point) Calculate the equilibriumrw ) (1 point) Calculate the equilibrium S ) (I point) Calculate the equilibrium SFor d) (1 point) Calculate the equilibrium / ) (1 point) Calculate the equilibrium IFor (2 point) Calculate the equilibrium CA.
5. Consider a small open economy that is currently running a trade deficit. a. With the help of a graph, what would happen to the real interest rate, the trade deficit, and desired levels of saving and investment if government expenditures were to increase? b. With the help of another graph, what would happen to the real interest rate, the trade deficit, and desired levels of saving and investment if consumption expenditures were to decrease?
Can someone please explain?
Consider two large open economies, the home economy and the foreign economy. In both countries the following relationships hold Domestic Foreign Desired consumption, Cd-320 + 0.4(Y-T)-200rw. Desired investment, 150 200* Output, Y = 1.000 Taxes, T 200 Government purchases. G 275 Fr4800.4(YFr To 300r. For 225 300 For1,500 For-300 For 300 a. What is the equilibrium interest rate in the international capital market?(Enter your response as a decimal rounded to three places.) What are the equilibrium...
4. Show and describe what happens in a LARGE OPEN ECONOMY to consumption (C), real interest rates (r), domestic investment (I), domestic savings (S), net exports (NX), capital flow (CF), and the real exchange rate (E) when there is a decrease in government spending in the large open economy. Show all steps.
2. Consider a large open domestic economy with a financial account surplus. i. Draw a diagram showing this situation (Your answer should include two graphs, one for the omestic economy and one for the foreign economy). (10 Points)- Note: Draw the two graphs side by side and clearly indicate the world interest rate as a single line going through both graphs. ii. What are the effects, in equilibrium, on the world real interest rate, domestic national saving, domestic investment, the...
8. In a small open economy, if the world real interest rate is above the rate at which national saving exceeds domestic investment, then there will be a trade _and net capital outflow. A) surplus; negative B) deficit; positive C) surplus, positive D) deficit; negative
31. Starting from a small open economy with balanced trade, if large foreign countries increase their domestic government purchases, this policy will tend to increase: A) investment in the small open economy. B) saving in the small open economy. C) exports by the small open economy. D) imports by the small open economy.
14. Consider the open-economy loanable funds model with flexible prices and capital mobility. Suppose that the world consists of a small open economy (we call this domestic) and the rest of the world (we call this foreign). Answer the following questions with the aid of figures where appropriate a. How does an increase in domestic government expenditure affect trade balance and real exchange rate? (2 points] b. How does an increase in foreign government expenditure affect the trade balance and...
6. A large open economy has desired national saving of sd 2000+ 1000-, and desired national investment of Id - 1500- 500/- he foreign economy has desired national saving of sfor 1200+ 1000.", and desired national investment of or 2000-500-w, ) (5 point) Calculate the equilibriumrw ) (1 point) Calculate the equilibrium S ) (I point) Calculate the equilibrium SFor d) (1 point) Calculate the equilibrium / ) (1 point) Calculate the equilibrium IFor (2 point) Calculate the equilibrium CA.
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