in the portfolio balance model, what effect, other factors constant, will a foreign government's budget deficit...

in the portfolio balance model, what effect, other factors constant, will a foreign government's budget deficit financed by issuing bonds have on the home country's curreny value and why?

Expert Solution

Rahul Sunny answered 1 year ago

a. Explain with a graph the effect of a government budget deficit in market for foreign-currency...

a. Explain with a graph the effect of a government budget deficit in market for foreign-currency exchange! b. Explain with a graph the effects when government imposes import quota on imported goods in market for market for foreign currency exchange! c. Explain with a graph the effect of capital flight in a country!

1. If other factors are held constant, what is the effect of decreasing the variability of...

1. If other factors are held constant, what is the effect of decreasing the variability of scores in a sample (i.e., decreasing a sample variance or standard deviation)? Hint: Look at the formulas for the estimated standard error and t-test for a single sample to figure out the answer. A. It will increase the estimated standard error and decrease the likelihood of rejecting H0. B. It will increase the estimated standard error and increase the likelihood of rejecting H0. C....

Analyze the potential change in the monetary base if the Government's budget deficit is financed by...

Analyze the potential change in the monetary base if the Government's budget deficit is financed by the issuance of government bonds and the majority of government bonds are purchased by commercial banks.

Compare the impact of an increase in the government's budget deficit on national saving, interest rate...

Compare the impact of an increase in the government's budget deficit on national saving, interest rate and investment spending in two cases: a small open economy and a closed economy. The two economies are otherwise comparable. Assume prices are flexible and that factors of production are fully employed in both economies. Assume there is perfect capital mobility for the small open economy. (125 words maximum)

The Portfolio Balance Model assumes a country has foreign denominated assets, but no foreign denominated liabilities.

The Portfolio Balance Model assumes a country has foreign denominated assets, but no foreign denominated liabilities. How do you think the implications would change if the country had foreign denominated liabilities, but no foreign denominated assets? What implication may this have for the effect of portfolio rebalancing on exchange rate movements for countries with positive and negative net international investment positions?

What is the effect of a government budget deficit on a) real interest rate and b)...

What is the effect of a government budget deficit on a) real interest rate and b) real exchange rate. Use the market for laonable funds and the market for foreign currency exchange in your answer. What are the negative effects of current US federal budget deficit? What are the positive effects? Argue.

If the USA continues to increase its federal budget deficit, what effect will this have on...

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Holding other factors in the Gordon model constant, if the market risk premium increases, the expected...

Holding other factors in the Gordon model constant, if the market risk premium increases, the expected price of the stock would fall." True or false?

According to the dividend discount model of stock valuation, holding other factors constant an decrease in...

According to the dividend discount model of stock valuation, holding other factors constant an decrease in investors required rate of return for a stock increases the stock's price.

While all other factors are constant, in the money market of the following applications, balance interest...

While all other factors are constant, in the money market of the following applications, balance interest rate and how and by which mechanisms will affect aggregate demand (investment and consumption expenditures) explain reasonably. a) Widespread practice of paying by credit card in taxis b) Central Bank decreasing the required (legal) provision ratio c) Central Bank selling bonds in the market through open market transactions . please write on online , not paper

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