10.Suppose in a small open economy, real GDP is $500 billion, consumption is $300 billion, investment is $120 billion, government purchases equal $100 billion, exports are $80 billion, and imports are $100 billion. whether this small country’s interest rate, rE, is above, below, or equal to the world interest rate, rw? Is S>I or I>S, or S=I in this economy? Using the saving-investment diagram for a small open economy, show your answer on the graph. Clearly mark both rE and rw and trade deficit/surplus (or capital inflow/outflow)

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Factor Models

Many attributes might be related to an asset's risk, including market capitalization (size), dividend yield, growth, price-earnings ratio, etc. The use of these traditional descriptors, however, presents a few problems: