Consider a large open economy that has a zero current account balance
What are the effects on the world real interest rate, national saving, investment, and the current account balance in equilibrium if (a) future income rises? (b) business taxes decline? (c) government purchases decline? (d) the future marginal product of capital declines?
(a) rw rises, S falls, I falls, CA falls.
(b) rw rises, S rises, I rises, CA falls.
(c) rw falls, S rises, I rises, CA rises.
(d) rw falls, S falls, I falls, CA rises.
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Between 1821 and 1930, the U.S. gained a comparative advantage in the production of agricultural goods
Indicate whether the statement is true or false
Graphically, economic growth is represented as
A) a movement along the production possibilities curve. B) a movement from a point inside the production possibilities curve to a point on the curve itself. C) an inward shift of the production possibilities curve. D) an outward shift of the production possibilities curve.