Consider the open-economy short run model. Suppose that the sensitivity of investment to interest rates is bibi =0.38, and the sensitivity of net exports to interest rates is b nxb nx=0.13. If the foreign interest rate rises by 2.52 percentage points and the domestic interest rate rises by 0.22 percentage points, by how much does short-run output change? Report your answer in percentage points to 2 decimal places.

Consider the open-economy short run model. Suppose that the sensitivity of investment to interest rates is bibi =0.38, and the sensitivity of net exports to interest rates is b nxb nx=0.13. If the foreign interest rate rises by 2.52 percentage points and the domestic interest rate rises by 0.22 percentage points, by how much does short-run output change? Report your answer in percentage points to 2 decimal places.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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