In the open-economy IS-LM model, an increase in the domestic interest rate r will, other things equal, cause domestic investment to and the trade balance to increase; increase decrease; increase O increase; decrease decrease; decrease
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- Consider the following economy:- Mariginal propensity to save = 0.2 Mariginal propensity to import = 0.2 Investment = $500 Governement spending = $300 Taxes = $ 200 Exports = $400 Autonomous import spending = $100 Given this information, beginning at the intial equilibirum output, suppose instead that exports rise by 50. What is the change in current account balance? A: -$25 B: $45 C: -$75 D: $35 E - None of the aboveConsider the following economy:- Mariginal propensity to save = 0.2 Mariginal propensity to import = 0.2 Investment = $500 Governement spending = $300 Taxes = $ 200 Exports = $400 Autonomous import spending = $100 Given this information, if governemnt spending falls by $50, what is the change in current account balance? A: -$35 B: -$15 C: -$75 D: $35 E - None of the aboveHow and why will switching from a fixed to flexible exchange rate regime affect exports as a percentage of GDP/Exports-GDP-ratio Plz do fast.
- In an open economy under flexible exchange rates where the central bank keeps money supply fixed, a tax cut will cause an increase in which of the following?net exportsthe exchange rate, Eexportsall of the abovenone of the aboveWho receives the greatest benefit from a trade deficit? O Foreign consumers O Domestic farmers exporting agricultural products O Domestic firms in industries with significant imports O Domestic individuals who own stock Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.For a given level of output (Yf), will the current account balance (CA) vary inversely with the level of domestic absorption (A)? Why or why not? Explain.
- In March 2023, imports for the US exceeded their exports by $60.6 billion. In June 2023, the importsexceeded the exports by $74.6 billion. If this trend continues, what impact can this have on the US in the longterm?A. Increased foreign investmentB. Stronger domestic currencyC. Decreased trade protectionismD. Accumulation of foreign debtConsider a world with only two countries (i.e., two large open economies), the home country and the foreign country. In the home country the following relationships hold: { refer to image } a) What is the world equilibrium interest rate? What are the equilibrium values of consumption, national saving, investment, and the current account balance in each country?Assume that the interest rate is given and equal to i =i0 and also that the real exchange rate is constant. We assume aggregate spending by domestics residents is A = A + cY - bi and net exports, NX are given by Q = Q + mY, where Q is autonomous import spending. Exports are given and equal to X = X. A) What is the total demand for domestic goods. B)What is the equilibrium level of income? Faiz oranının verildiğini ve i = i0'a eşit olduğunu ve ayrıca reel döviz kurunun sabit olduğunu varsayalım. Yerli sakinlerin toplam harcamalarının A = A + cY olduğunu varsayıyoruz - iki ve net ihracat, NX, Q = Q + mY ile verilir, burada Q otonom ithalat harcamasıdır. İhracat verilir ve X = X'e eşittir.A) Yerli malı için toplam talep nedir?B) Denge gelir düzeyi nedir?
- Consider a world with only two countries (i.e., two large open economies), the home country and the foreign country. In the home country the following relationships hold: { refer to image } b) Suppose that in the home country the desired investment increases by 100, that is, I^d = 400−100r^w. What is the world equilibrium interest rate? What are the equilibrium values of consumption, national saving, investment, and the current account balance in each country?Suppose that Americans decide to increase theirsaving.a. If the elasticity of U.S. net capital outflow withrespect to the real interest rate is very high, willthis increase in private saving have a large orsmall effect on U.S. domestic investment?b. If the elasticity of U.S. exports with respect to thereal exchange rate is very low, will this increase inprivate saving have a large or small effect on theU.S. real exchange rate?Consider the following economy:- Mariginal propensity to save = 0.2 Mariginal propensity to import = 0.2 Investment = $500 Governement spending = $300 Taxes = $ 200 Exports = $400 Autonomous import spending = $100 Given this information, What is initial current account balance for the economy? A - Current account deficit of $205 B - Current account deficit of $125 C - Current account surplus of $125 D - Current account surplus of $150 E - None of the above
