Consider a small open economy that is currently running a trade surplus. Answer the following questions using

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Consider a small open economy that is currently running a trade surplus. Answer the following questions using a graphic representation of desired saving and investment in the small open economy:

a) Is the world real interest rate higher or lower than the real interest rate that would prevail if this was a closed economy?

b) What would be the effect of an autonomous decrease in investment on the trade balance?

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Macroeconomics Policy And Practice

ISBN: 9781137393951

1st Edition

Authors: Frederic S. Mishkin

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Question Posted: Nov 11, 2024 05:00 AM

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Consider a small open economy that is currently running a trade surplus. Answer the following questions using

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Macroeconomics Policy And Practice

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