According to economists, which of the following statements about international capital mobility is CORRECT? O International resource mobility has had a negative effect upon world GDP. O International resource mobility has had no effect upon world GDP. O International resource mobility has had a positive effect upon world GDP. International resource mobility has had such a small effect upon world GDP that it is not worth measuring

According to economists, which of the following statements about international capital mobility is CORRECT? O International resource mobility has had a negative effect upon world GDP. O International resource mobility has had no effect upon world GDP. O International resource mobility has had a positive effect upon world GDP. International resource mobility has had such a small effect upon world GDP that it is not worth measuring

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Open-Economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 3QCMC

See similar textbooks

Similar questions

Q3. You are given the following information about an economy: Gross private domestic investment = 40 Government purchases of goods and services = 30 Gross national product (GNP) = 200 Current account balance = -20 Taxes = 60 Government transfer payments to the domestic private sector = 25 Interest payments from the government to the domestic private sector = 15 (Assume all interest payments by the government go to domestic households.) Factor income received from rest of world = 7 Factor payments made to rest of world = 9 Find the following, assuming that government investment is zero: (a.) Consumption (b.) Net exports (c.) GDP (d.) Net factor payments from abroad (e.) Private saving (f.) Government saving (g.) National saving
Y2 Assume that neither country experiences population growth or technological progress and that 4 percent of capital depreciates each year. Assume further that country A saves 14 percent of output each year and country B saves 26 percent of output each year. Using your answer from part b and the steady-state condition that investment equals depreciation, find the steady-state level of capital per worker (?∗)(k∗), income per worker (?∗)(y∗), and consumption per worker (?∗)(c∗) for each country. For Country A and For Country B ?∗k∗ for Country A: ?∗k∗ for Country B: ?∗y∗ for Country A: ?∗y∗ for Country B: ?∗c∗ for Country A: ?∗c∗ for Country B:
Q4. Suppose that Brazil initially has a higher capital rental rate (r) than the United States. What would be the direction of foreign direct investment (FDI)? Use a world-capital-market graph to show the effects of FDI on the two countries’ rental rates of capital, GDP, and return to labor owners. Identify the net change in world output in the above graph. Discussion: what other effects could FDI cause in the recipient and source countries that are not captured in the model? Your answer
Q3. You are given the following information about an economy: Gross private domestic investment = 40 Government purchases of goods and services = 30 Gross national product (GNP) = 200 Current account balance = -20 Taxes = 60 Government transfer payments to the domestic private sector = 25 Interest payments from the government to the domestic private sector = 15 (Assume all interest payments by the government go to domestic households.) Factor income received from rest of world = 7 Factor payments made to rest of world = 9 Find the following, assuming that government investment is zero: (e.) Private saving (f.) Government saving (g.) National saving
Consider an economy that is perfectly open to the world capital market. Suppose that the world rental price of capital (rw) was 0.3, and then it triples. Given that the production function is y=3k^(1/2) 1)The initial level of DGP per worker, y, (when rw was 0.3) is equal to: 5.4 15 3.35 4.5 2)By what factor does the level of GDP per worker changes when rw triples? y’ = 2y y’= 0.33y y’ = 3.003y y’ = 0.5y 3)The new level of GDP per worker, y’, (when rw becomes 0.9) is equal to: 16.2 5 15 10
Consider a developed country, Country A. Assume that the trade volume (exports + imports) with respect to its economic development level can be described by the following function: T(D)=2D^2+5D+9 Where: T(D) represents the trade volume in billions of dollars. D is the level of development, measured by some index (e.g., Human Development Index) where 0≤D≤10. Calculate the derivative of T(D) with respect to D. Interpret result in terms of the rate of change of trade volume with respect to development. At what level of development D does the country experience the highest rate of change in trade volume? If the standard deviation in the development index scores of developed countries is 1.2, how would this affect interpretation of trade patterns among developed countries? Note: For the purposes of this question, assume that the relationship is purely mathematical and doesn't account for other real-world factors that might influence trade volume.
You are given the following information about an economy: Gross private domestic investment = 40 Government purchases of goods and services = 30 Gross national product (GNP) = 200 Current account balance = -20 Taxes = 60 Government transfer payments to the domestic private sector = 25 Interest payments from the government to the domesticprivate sector = 15 (Assume all interest payments by the government go to domestic households.) Factor income received from rest of world = 7 Factor payments made to rest of world = 9 Find the following, assuming that government investment is zero: a. Consumption, Net exports,GDP and Net factor payments from abroad b. Private saving, Government saving and National saving
true/false explain If an advanced country has an absolute advantage in the production of everything (relative to certain less developed countries), the advanced country will benefit if it eliminates trade with less developed countries and becomes self-sufficient.
1. Which of the following is true and which is false:a) The trade-to-GDP ratio for a nation that had €600 million in exports, €400 million in imports,and GDP of €2,000 million is equal to 0.5.b) The trade-to-GDP ratio for a nation that had €600 million in exports, €400 million in imports,and GDP of €2,000 million is equal to 0.05.c) A trade-to-GDP ratio in percentage terms equal to 120% means that the country exchanges1.2 times worth of goods and services of what it generates domestically over a certain period.d) The trade-to-GDP ratio is a measure of how income distribution between nations.e) The trade-to-GDP ratio is a measure of how intensively a country participates in internationaltrade.f) The higher the trade-to-GDP ratio, the stronger is the purchasing power of the country in theworld markets
Suppose that in a year Indonesia can produce either 50 million tonnes of petrol or 20 million tonnes of iron or any linear combination, for example, 25 million tonnes of petrol and 10 million tonnes of iron. Also suppose that in a year Australia can produce either 80 million tonnes of petrol or 64 million tonnes of iron or any linear combination, for example, 20 million tonnes of petrol and 48 million tonnes of iron. e. Suppose Australia wants 30 million tonnes of petrol and Indonesia wants 20 million tonnes of petrol and as much iron as they can get. Show that Indonesia and Australia can have more iron while still meeting their petrol requirements when they specialise and trade than when they do not. 2
provides some hypothetical data on macroeconomicaccountsforthreecountriesrepresented by A, B, and C and measured in billions of currency units. In Table, private household saving is SH, tax revenue is T, government spending is G, and investment spending is I. a. Calculate the trade balance and the net inflow of foreign saving for each country. b. State whether each one has a trade surplus or deficit (or balanced trade). c. State whether each is a net lender or borrower internationally and explain.
If Portugal has a total of 90 man-hours of resources available for production, while England has only 30, what are the resource costs of wine and cloth? a. Wine costs 1/2 man-hours/bottle and cloth costs 1/2 man-hours/yard in England b. Wine costs 1 man-hour/bottle and cloth costs 1 man-hour/yard in England c. Cloth costs 1 man-hours/yard and win costs 1 man-hours/bottle in Portugal d. Wine costs 1/2 yards/bottle and cloth costs 2 bottles/yard in Portugal