The following graph shows a relationship between saving (S), investment (I) and world interest rate (r*); given that r*> r, where r is domestic interest rate.   Graphically show and interpret the impacts of following policy measures on saving (S), investment (I), and net exports (NX): a) Change in fiscal policy at home b) Change in fiscal policy abroad c) An increase in investment demand

Question

Q-3:

B.

The following graph shows a relationship between saving (S), investment (I) and world interest rate (r*); given that r*> r, where r is domestic interest rate.

 

Graphically show and interpret the impacts of following policy measures on saving (S), investment (I), and net exports (NX):
a) Change in fiscal policy at home
b) Change in fiscal policy abroad
c) An increase in investment demand

Expand

Expert Answer

1 Rating

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Economics

Macroeconomic models

Related Economics Q&A

Find answers to questions asked by students like you.

Q: Indicate whether the statement is true or false, and justify your answer.The internal rate of return...

A: The internal rate of return is the expected future return of the potential investment. It is used in...

Q: Expansionary Monetary Policy and Fixed ER with perfect capital mobility in short run and long run. E...

A: Let us understand the effect of expansionary monetary policy under fixed exchange rate with perfect ...

Q: solve sub parts b ,c and d early .i upvote definetly but correctly solve  b,c and d

A: b. Derive cost functions by equating Marginal Rate of Technical substitution (MRTS) to the input pri...

Q: what is the importance of calculating the growth rate?

A: Growth rate refers to the percentage change in the variable such as revenue, investment and other ma...

Q: The packaged milk market in Pakistan is perfectly competitive.i. Some firms in the market are making...

A: A perfectly competitive market is a type of market structure comprising a large number of small firm...

Q: What is the goal of the Multitasking machine?

A: Multitask machining is the ability to conduct specific unattended manufacturing operations, without ...

Q: Explain inflation dynamics for the Turkish economy using modern Phillips curve equation. - Use data ...

A: The following table represents the data regarding the unemployment rate and inflation rate of countr...

Q: Suppose you are the economic advisor of Jackie Brown Company, a perfectly competitive company that i...

A: A perfectly competitive market comprises a large number of small firms that sell goods or services o...

Q: What market structure best describes the environment within which your organization operates?(Hospit...

A: Market structures define the structural characteristics of a given market which is in regard to prod...

Q: How does Monetary Policy affect Economic Growth?

A: The monetary policy is policy of monetary authority to control money supply and rate of interest in ...

Q: Which are three general ways based on data collected by the U.S. department of Commerce that Consume...

A: The data collection is a procedure of collecting and analyzing the data using a technique to get an ...

Q: Estimate the cost of an oil change (5 quarts of oil) and a new oil filter for your automobile at a l...

A: The mark up price refers to the adding price tot eh total cost of production. in other words, Produc...

Q: sub-question a, b , c.

A: Answer: a. Susan’s action is X. David’s action is M. b. Strictly dominated: a strategy X for a pla...

Q: I need the solution of Part (b) & (c) only.

A: Since you have asked for the solution of B and C only. So, I am answering only B and C.

Q: How do the nominal exchange rate and the real exchange rate differ? How do we find the realexchange ...

A: The exchange rate is a rate at which one currency is exchanged for another. It helps to find the val...

Q: Because of the sales tax in a particular region, a customer in a supermarket must pay $1.46 for a pa...

A: Answer: Effective tax rate is the average tax rate that is paid by a corporation or an individual.  

Q: The annual cost to maintain a cemetery plot is $75. If interest is 6% how much must be set asideto p...

A: The annual maintenance cost = $75 The interest rate that must be set aside = 6%

Q: Indicate whether the statement is true or false, and justify your answer.According to the Grossman m...

A: The Grossman model is a model that studies the demand (DD) for medical care and health outlined by M...

Q: The Akerlof model can be used to model the health insurance market. In this market, which party is a...

A: According to Akerlof's adverse selection problem the seller has additional information than the purc...

Q: Differentiate between Pure and Mixed Investments with examples?

A: Investment: The term investment refers to the current forgone consumption that is used to generate t...

Q: What is Bid submittal deadline?

A: A bid refers to an offer made by a buyer, dealer, or trader to purchase a security, product, or curr...

Q: The united states is a big exporter of animals feeds, corn ,meat, fruits, vegetables and other agric...

A: Globalization is the distribution across national boundaries and cultures of goods, technology , kno...

Q: Explain Demand Management Options?

A: Demand management is a process to manage the supply of the products and services in order to balance...

Q: An interest rate of 2% per month is the same as: (a) 24% per year, compounded monthly (b) a nominal ...

A: Given that, interest rate (i) is 12% per month. Then the annual interest rate (Ai) can be calculated...

Q: . P’Dim and P’Green discusses the use of cowrie shells as money. Although cowrie shells are no longe...

A: Money refers to any tangible item with an intrinsic value of its own and/or that has been declared a...

Q: What does a positive NPW mean?

A: We get NPW by the following expression,

Q: I need help working through this problem

A: Market clearing price and quantity is archived where both seller and buyer agree to exchange their g...

Q: ONLY SOLVE D   An investor with a total wealth of $100 is faced with the following opportunities. Fi...

A: Given: Total wealth = $100  In good times, the investment would receive = $144 In good times, the in...

Q: What would the Supply Curve of houses in your city look like in the next 10 hours? In three months? ...

A: A supply curve is the locus of all quantities of a good or service supplied at different price level...

Q: Define simultaneous causality bias. Explain the potential for simultaneouscausality in a study of th...

A: Simultaneous bias is a threat to internal validity in a causal analysis. It occurs when the independ...

Q: What do you know about COASE theorem? Under what conditions COASE theorem would not work effectively...

A: Coase theorem assumes that here is no transaction cost involved and full competitive market exists. ...

Q: Consider the market for station wagons. For each of the events listed below, identify which of the d...

A: d. Engineers develop new automated machinery for the production of station wagons. This will reduce ...

Q: 1) Using both a diagram and words explain what is meant by the reservation wage.  Explain it correct...

A: The reservation pay is the minimum wage rate at which an employee will be able to consider a specifi...

Q: Give an example of a government-created monopoly. Is creating this monopoly necessarily bad public p...

A: i. Monopoly is defined as a market structure in which there is a single firm producing all the outpu...

Q: Table 1-3  Price per kilo (Dollars) Quantity demanded (kilos) Quantity supplied (kilos) ...

A: As shown in the table the equilibrium price is $12 this is because at that price quantity demanded i...

Q: You are considering purchasing a new punch press machine. This machine will have an estimated servic...

A: Click to see the answer

Q: Do you feel a business’ primary responsibility is to make a profit, or do you feel there is some res...

A: The primary responsibility of business is not only to make profits but there are certain other respo...

Q: Mauricio has a circus act, and he has a budget of $720 to spend on monkeys and unicycles. The cost o...

A: The budget of the person is given as $720. The cost of unicycle (U) is $120 and that of monkey (M) i...

Q: In the Republic of Nurds, assume that in 2011 the following prevails:Y= $200 G= $0 C= $160 T= $0 S= ...

A: Equilibrium refers to the situation where the aggregate income is equal to aggregate expenditure.

Q: Grossmania gave the following additional information on its national economy Items Billions of...

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If y...

Q: It is sometimes suggested that the State Bank of Pakistan should try to achievezero inflation. If we...

A: Click to see the answer

Q: A group of concerned citizens has established a trust fund that pays 6% interest compounded monthly ...

A: Click to see the answer

Q: Consumer’s basket contains 20 pizzas and 10 compact discs. For each year, compute the cost ofthe bas...

A: A price index number is a macroeconomic measure that compares a series of prices in different time p...

Q: Is expansionary fiscal policy more attractive topoliticians who believe in larger government or topo...

A: The expansionary fiscal policy is more attractive to politicians who believe in larger government. A...

Q: Describe the concepts of absolute poverty to relate the situation of Niger ?

A: Poverty refers to a situation when there is not enough income or material possessions for a person's...

Q: The economy of Elmendyn contains 2000 $1 bills. a) If people hold all money as currency, what is the...

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts fo...

Q: 8. (The Short-Run Firm Supply Curve) Each of the followingsituations could exist for a perfectly com...

A: A firm in a perfectly competitive market is one of the many small firms producing and supplying good...

Q: Differentiate between classical and neo-classical economics.

A: "Classical" and "neoclassical" are the names for two philosophical approaches to economics. As the n...

Q: How trade liberalisation policy affects amount of imports,exports and net exports?

A: The removal or reduction of trade barriers is a method of trade liberation. These barriers can be ta...

Q: Supposed that it is over populated country, how do you evaluate the effects of overpopulation consid...

A: Effects of over population is multi -dimensional.   Mathusian Theory of Population could explore the...