Suppose that some foreign countries begin to subsidize investment by instituting an investment tax credit. a. What
Question:
a. What happens to world investment demand as a function of the world interest rate?
b. What happens to the world interest rate?
c. What happens to investment in our small open economy?
d. What happens to our trade balance?
e. What happens to our real exchange rate?
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a If the countries that institute an investment tax credit are large enough to shift the world inves...View the full answer
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Related Book For 
Macroeconomics
ISBN: 978-1464168505
5th Canadian Edition
Authors: N. Gregory Mankiw, William M. Scarth
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