There are two large open economy. Current account balance of the home country is given by -15+30r", where rw is the world interest rate. Current account balance of the foreign country is given by 6+15rw. The equilibrium world interest rate is -20% 20% 15% -15%

There are two large open economy. Current account balance of the home country is given by -15+30r", where rw is the world interest rate. Current account balance of the foreign country is given by 6+15rw. The equilibrium world interest rate is -20% 20% 15% -15%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

There are two large open economy. Current account balance of the home country is given by
-15+30r", where rw is the world interest rate. Current account balance of the foreign country is
given by 6+15pw. The equilibrium world interest rate is
-20%
20%
15%
-15%

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