Figure 32-6Refer to this diagram of the open-economy macroeconomic model to answer the questions below.1312r1dO b. e4O c. elO d. e2bALBe5e4e3e2elRefer to Figure 32-6. If the economy were initially in equilibrium at rl and e3 and the government removes import quotas, the exchange rate moves toO a. e5

An economy that freely interacts with all the other countries without any restriction is known as…

Refer to this diagram of the open-economy macroeconomic model to answer the questions below. 13 12 r1 C O b. e4 O c. el O d. e2 a d b B 2 5 8 1 & e4 Refer to Figure 32-6. If the economy were initially in equilibrium at rl and e3 and the government removes import quotas, the exchange rate moves to O a. e5

Refer to this diagram of the open-economy macroeconomic model to answer the questions below. 13 12 r1 C O b. e4 O c. el O d. e2 a d b B 2 5 8 1 & e4 Refer to Figure 32-6. If the economy were initially in equilibrium at rl and e3 and the government removes import quotas, the exchange rate moves to O a. e5

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 21SCQ: Explain briefly whether each of the following would be more likely to lead to a higher level of...

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Figure 3 Refer to the following diagram of the open-economy macroeconomic model to answer the questions that follow. Graph (a) Graph (b) REAL INTEREST RATE 555 ď Wi QUANTITY OF LOANABLE FUNDS REAL EXCHANGE RATE b. decrease because supply would shift right. c. increase because supply would shift left. d. decrease because demand would shift left. REAL INTEREST RATE NCO D NET CAPITAL OUTFLOW D₂ Graph (c) S, S, S, C QUANTITY OF DOLLARS Refer to Figure 3. If the interest rate were initially at r2 and an import quota were imposed, the interest rate would a. stay at r2.
The Small Open Economy macroeconomic model assumes that GDP is constant. However, the model could be used to analyze the effects of a one-time increase in GDP as a rightward shift of the supply of loanable funds. What would the model predict about the real interest rate, net capital outflow, net exports, and the real exchange rate when GDP increases? B v E E Pa... v ...
If a country is running a government budget surplus, why is (T - G) on the left side of the saving-investment identity?
Imagine that the economy of Germany finds itself in the following situation: the government budget has a surplus of 1 of Germanys GDP; private savings is 20 of GDP; and physical investment is 18 of GDP. Based on the national saving and investment identity, what is the current account balance? If the government budget surplus falls to zero, how will this affect the current account balance?
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Suppose that Americans decide to increase theirsaving.a. If the elasticity of U.S. net capital outflow withrespect to the real interest rate is very high, willthis increase in private saving have a large orsmall effect on U.S. domestic investment?b. If the elasticity of U.S. exports with respect to thereal exchange rate is very low, will this increase inprivate saving have a large or small effect on theU.S. real exchange rate?
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provides some hypothetical data on macroeconomicaccountsforthreecountriesrepresented by A, B, and C and measured in billions of currency units. In Table, private household saving is SH, tax revenue is T, government spending is G, and investment spending is I. a. Calculate the trade balance and the net inflow of foreign saving for each country. b. State whether each one has a trade surplus or deficit (or balanced trade). c. State whether each is a net lender or borrower internationally and explain.