Q9. Suppose that Malaysians decide to increase their saving. a) If the elasticity of Malaysian net capital outflow with respect to the real interest rate is very high, will this increase in private saving have a large or small effect on Malaysian domestic investment? b) If the elasticity of Malaysian exports with respect the real exchange rate is very low, will this increase in private saving have a large or small effect on the Malaysian real exchange rate?
Q9. Suppose that Malaysians decide to increase their saving. a) If the elasticity of Malaysian net capital outflow with respect to the real interest rate is very high, will this increase in private saving have a large or small effect on Malaysian domestic investment? b) If the elasticity of Malaysian exports with respect the real exchange rate is very low, will this increase in private saving have a large or small effect on the Malaysian real exchange rate?
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter14: A Macroeconomic Theory Of The Open Economy
Section: Chapter Questions
Problem 9PA
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