2. Use the open economy macro model (the one with 3 diagrams) to illustrate the con- sequences of a crisis in all other countries in the world that makes foreigners want to bring all of their money into the United States. Make sure you tell me the following: (a) Draw the diagrams properly. (b) Tell me which curve or curves move. (c) Tell me which direction the curve or curves move in. (d) Tell me what happens to Savings in equilibrium. (e) Tell me what happens to Investment Plus Net Capital Outflow in equilibrium.

2. Use the open economy macro model (the one with 3 diagrams) to illustrate the con- sequences of a crisis in all other countries in the world that makes foreigners want to bring all of their money into the United States. Make sure you tell me the following: (a) Draw the diagrams properly. (b) Tell me which curve or curves move. (c) Tell me which direction the curve or curves move in. (d) Tell me what happens to Savings in equilibrium. (e) Tell me what happens to Investment Plus Net Capital Outflow in equilibrium.

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter36: Six Debates Over Macroeconomic Policy

Section: Chapter Questions

Problem 3PA

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