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 graphical 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 were 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: 978-0133424317

2nd Edition

Authors: Frederic Mishkin

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Question Posted: Feb 17, 2024 11:01 PM

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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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Effect of an Increase in Government Budget Surplus on Real Interest Rate Desired Saving and Net Exports in Large and Small Open Economies a Large Open ...View the full answer

Macroeconomics Policy And Practice

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