Problem 3: 011 March 11 2011. a massive earthquake and tsunami struck off the Japanese coast that also smashed a nuclear power plant. The earthquake
Problem 3: 011 March 11 2011. a massive earthquake and tsunami struck off the Japanese coast that also smashed a nuclear power plant. The earthquake and tsunami destroyed a signicant portion of Japan's capital stock, which was estimated to be a damage of around $300 billion. Assume that Japan is a large open economy in the international funds market and that the shock is temporary and current. a) b) D Explain the effects of the reduction in the capital stock on current employment. current output, and current national saving. \"-"ill the national saving curve expand, contract, or remain unaffected? \"fill the potential change in domestic saving in Japan that affects the supply of funds decrease. increase, or not change the international real interest. rate, 1"\"? Holding the desired amount of future capital constant, Re\
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