MACROECONOMICS W/CONNECT
18th Edition
ISBN: 9781307253092
Author: McConnell
Publisher: Mcgraw-Hill/Create
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Question
Chapter 22, Problem 6DQ
To determine
The returns on capital in IACs and DVCs.
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Suppose that national saving is $1568 billion, investment is $1835 billion, and private saving is $1490 billion. How much is the current
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-$221 billion
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average for all those countries.
O 20 percent of GDP
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Question 2
Suppose that the production function is Y = 10K5L5, the population growth rate is 15 percent
and the depreciation rate is 5 percent. What is the steady state level of k if the economy saves 30
percent?
O 400
O 225
100
O 1000
Question 3
Suppose that the production function is Y 10K SL5, the population growth rate is 15 percent
and the depreciation rate is 5 percent. What is the steady state level of y if the economy saves 30
percent?
250
350
150
O 450
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- Asaparrow_forwardAssume that the U.S. interest rate is 12 percent, while the British interest rate is 15 percent. If interest rate parity exists, then: O a.U.S. investors will earn 12 percent whether they use covered interest arbitrage or invest in the United States. O b. U.S. investors will earn a higher rate of return when using covered interest arbitrage than what they would earn in the United States. O c. British investors who invest in the United Kingdom will achieve the same return as U.S. investors who invest in the United States. O d. U.S. investors will earn 15 percent whether they use covered interest arbitrage or invest in the United States.arrow_forwardWhich of the following is (are) likely to lead to increased capital inflow into Canada? O a. All of the answers are correct O b. Canadian government increases business taxes Oc The Bank of Canada cuts interest rates O d. Foreign countries cut their interest ratesarrow_forward
- In a small open economy, if domestic saving equals $50 billion and domestic investment equals $50 billion, then there is and net capital outflow equals Select one: O a. a trade deficit; $100 billion O b. balanced trade; $0 C. a trade surplus; $100 billion O d. balanced trade; $100 billionarrow_forwardAccording to the open-economy macroeconomic model, import quotas increase which of the following O a. net exports and net capital outflow O b. net exports but not net capital outflow. O c. net capital outflow but not net exports. O d. neither net exports nor net capital outflow.arrow_forwardStatement 1: One of several World Trade Organization's primary missions is to promote improved living standards, job growth, and social and economic development and progress. Statement 2: The United Nations is usually considered as the lender of last resort for nations with troubled economies. Statement 3: World Bank is responsible for policing the fair international trade. O Statement 1 is correct but statements 2 and 3 are incorrect. O Statement 3 is correct but statements 1 and 2 are incorrect. © Statement 1 is incorrect but statements 2 and 3 are correct. O All statements are correct. O All statements are incorrect.arrow_forward
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