Does the saving and investment equation imply that a country's national saving must always equal its domestic investment? Explain
What will be an ideal response?
No. In an open economy, the saving and investment equation implies that a country's national saving must always equal domestic investment plus net foreign investment.
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The Heckscher-Ohlin model is famous for being elegant and mathematically sophisticated, yet failing to describe reality. One manifestation of this fact is Trefler's Case of Missing Trade. Explain what exactly is missing
In what sense is it missing? How would you explain why it is missing? How can a relaxation of the identical production functions explain the case of the missing trade? How did the results obtained by Davis and Weinstein strengthen support for the validity of the HO model?
In the long run, firms in markets that are ________ earn zero economic profits
A) perfectly competitive B) monopolistically competitive C) monopolies D) Both A and B