Suppose that an economy starts with a net foreign asset to GDP ratio (NFA/Y) equal to -30%. After one year, the real interest rate (difference between the nominal interest rate and the inflation rate) has been -10%. What will the NFA/Y ratio become after this year due to this effect? Give your answer with two decimal places.

Suppose that an economy starts with a net foreign asset to GDP ratio (NFA/Y) equal to -30%. After one year, the real interest rate (difference between the nominal interest rate and the inflation rate) has been -10%. What will the NFA/Y ratio become after this year due to this effect? Give your answer with two decimal places.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: Money Growth And Intlation

Section: Chapter Questions

Problem 6PA

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