Econ 335

The Central Bank of Thailand (CBT) has decided that universal home ownership is a worthwhile goal for the country. To encourage new home construction and purchase, it expands the Thai money supply significantly. 1. Assuming that CBT is operating under a floating exchange rate system, how successful will this home ownership program be in a world of internationally mobile capital? Be sure to demonstrate the effects: 1. domestic interest rates, domestic investment and international investment. Explain in order to receive full credit. 2. domestic output (GDP) and unemployment. Explain in order to receive full credit. 3. the value of the Thai bhat (Thailand's currency) and net exports. Explain in order to receive full credit