In a large open economy ________. the effect of shifts in saving and investment on net...

In a large open economy ________.

the effect of shifts in saving and investment on net capital flows are in the same direction as in a closed economy

the effect of shifts in saving and investment on the domestic real interest rate and the actual levels of saving and investment are in the same direction as in a closed economy

the effect of shifts in saving and investment on the trade balance are in the same direction as in a closed economy

all of the above

none of the above

Solutions

Expert Solution

All of the above option is correct.

EXPLANATION-

Large open economy as being a mix of a small open economyand a closed economy.

The direction of the effect of shifts in saving and investment on the tradebalance and net capital flows are the same as in a small open economy, while the direction of the effect on the domestic real interest rate and the actual levels of saving and investment are the same as in a closed economy.

Rahul Sunny answered 1 year ago

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