If China (a country known to have a large open economy) were to become a closed...

If China (a country known to have a large open economy) were to become a closed economy, how might the long-run real interest rate, GDP, saving, and investment change?

Expert Solution

Rahul Sunny answered 2 years ago

Assume China is a large open economy country and it want to use optimal capital controls...

Assume China is a large open economy country and it want to use optimal capital controls measures. List 2 benefits of the measure and discuss why China (select a large open economy) can use optimal capital controls measures but individuals cannot.

China is a large open economy with a large trade surplus. The latter has faced since...

China is a large open economy with a large trade surplus. The latter has faced since 2018 a trade war launched by US President Donald Trump in order to rebalance trade with China. This trade war has had some success. China recorded a drop in its trade surplus towards the end of 2019. What effect does the decline in China's trade surplus have on the world interest rate? What is the effect on the Canadian current account (we will assume...

Let the home country be a large open economy. Assume that the home country wants to...

Let the home country be a large open economy. Assume that the home country wants to impose capital controls that prohibit foreign borrowing and lending by domestic residents. Analyze the effects of capital controls on country’s CA balance, national savings and investment, and on domestic and world real interest rates. Assume that before the capital controls were imposed, the home country had a large financial account surplus

Q1 Consider an open economy environment where China suddenly suffers a large collapse in its housing...

Q1 Consider an open economy environment where China suddenly suffers a large collapse in its housing market, so that new investment in China declines very substantially overall. If we view China as a very large component of the “Rest of the World” (especially as regards savings and investment), how would this event affect the “Home Country” which we can take to be the USA?

What is saving in open economy? Discuss what are differences of saving in closed and open...

What is saving in open economy? Discuss what are differences of saving in closed and open economy?

Show income determination in a closed economy in contrast to an open economy using the concepts...

Show income determination in a closed economy in contrast to an open economy using the concepts of income as determined by injections (like investment and exports) and leakages (like saving and imports). Discuss in words like Singapore, with a high reliance on international trade and capital flows, is an open economy.

please compare and explain the IS-LM curve in a closed economy and a small open economy

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Large Open Economy Large Open Economy: Political instability in Mexico in 1994.Discuss and explain what happens with words (abbreviations and arrows are fine) and with graphs (market for loanable funds and market for foreign currency) Case 1: what happens to NFI, r, NX and real exchange rate in the US. Case 2: what happens to NFI, r, NX and real exchange rate in Mexico

How can a country that is not closely linked to the world economy have a large...

How can a country that is not closely linked to the world economy have a large beta?

Suppose country Zee is a closed economy. Consider AD, SRAS and LRAS for the economy of...

Suppose country Zee is a closed economy. Consider AD, SRAS and LRAS for the economy of Zee. Tye economy begins at price level P0, with output equal potential GDP=Y*, budget is balanced. 3.1 Suppose the government of Zee increases tax, T while keeping government expenditure G unchanged. Are we having budget deficit or surplus? What would be the effect of this action on loanable funds, real interest rate, private savings and investment, and levels of debt in country Zee? 3.2...

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