When there are two large open economies in the world, if capital goods become relativel cheaper compared to consumption goods in the foreign country, the foreign country's saving wi and the foreign country's investment will fall; rise rise; fall rise; rise fall; fall
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- Which scenario best demonstrates foreign direct investment? Salia started a Polish restaurant in her home country, the United States, after she took cooking lessons from a well-known chef in Poland. Super Blooms, a reputable vegetable plant company in Holland, exports tomato, pepper, and potato garden plants across the globe. Ups n Downs Inc., a Chinese firm, supplies roller coaster components in the United States. Domesticity, a U.S.-based office furniture company, has set up its own assembly plant in Japan to cater to the needs of the Asian market. Lux Linens, a fabric conglomerate in the United States, imports raw silk from China and Italy.provides some hypothetical data on macroeconomicaccountsforthreecountriesrepresented by A, B, and C and measured in billions of currency units. In Table, private household saving is SH, tax revenue is T, government spending is G, and investment spending is I. a. Calculate the trade balance and the net inflow of foreign saving for each country. b. State whether each one has a trade surplus or deficit (or balanced trade). c. State whether each is a net lender or borrower internationally and explain.Which of the following countries would you expect to have intertemporal produc- tion possibilities biased toward current consumption goods, and which would be biased toward future consumption goods? a. A country like Egypt that has discovered large reserves of natural gas that can be exploited with massive investments. CHAPTER 6 · The Standard Trade Model 175 b. A country like India that is catching up technologically due to massive out- sourcing services, especially from wealthy countries. c. A country like Germany or the United States where a ban on immigration means a limited inflow of immigrants. d. A country like Indonesia that started developing its infrastructure to make industries more productive and cost-efficient. e. A country like the Netherlands that aims to reduce with low investment in the use of biofuels. energy and gas consumption
- With the following excerpts, how far does the extract suggest the BRICS are open economies?"Consider a small open economy that produces and consumes two goods: textiles and technology. The country has experienced a technological breakthrough in textile manufacturing, increasing its productivity. At the same time, the global demand for technology, the country's other export, has decreased. Analyze the following: a) How would the technological breakthrough in textile manufacturing affect the country's production possibility frontier? b) What could be the short-term and long-term effects on the country’s terms of trade? c) Discuss how the decrease in global demand for technology could influence the country's export revenues and economic growth. d) Propose one policy measure the government could take to mitigate any negative impacts on the economy due to these changes."Which of the following is TRUE of an open economy? GDP = C+I+G+X- IM O GDP = C+ I+G GDP = T- TR -G GDP = SPrivate + SGovernment %3D
- Please Draw a diagram for Saving and Investmetn in a small open economy. Assume the world real interest rate is BELOW the closed equilibrium interest rate for a random country that you drew. Is this country a foreign borrower or foreign lender in the world? Please explain what the intuition for the investment and savings functinos.. Like the say for a Home investors and the Home savers. Please draw out an image i am a visual learner and that is what will help me understand it best.Which of the following is TRUE of an open economy? GDP=C+I+G+X-IM OGDP =C+I+G GDP=T-TR-G GDP = Sprivate + SGovernmentProblemYou are given the following information about an open economyGross private domestic investment:40Government purchases of goods and services:30Gross national product(GNP):200Current account balance:-20Taxes:60Government transfer payment to the domestic private sector:25Interest payments from the government to the domestic privatesector:15Factor in come received from the rest of the world:7Factor payments made to the rest of the world:9Calculate the following:a)Consumptionb)NetExportsc)GDPd)Net factor payments from abroade)Private savings (f) Government savings (g) National savings
- Q4. Suppose that Brazil initially has a higher capital rental rate (r) than the United States. What would be the direction of foreign direct investment (FDI)? Use a world-capital-market graph to show the effects of FDI on the two countries’ rental rates of capital, GDP, and return to labor owners. Identify the net change in world output in the above graph. Discussion: what other effects could FDI cause in the recipient and source countries that are not captured in the model? Your answerIn a country, private savings equals 600, the government budget surplus equals 200, and the trade surplus equals 100. What is the level of private investment in this economy?I need an answer max in an hour please. "Say whether following statement is True or False and Please provide a concise explanation of this as well as an explanation with a diagram, if its possible to do." If there are free flows of capital in an open economy, all countries share a common production function and technology, and have the same depreciation rate, we would expect to observe unconditional convergence of levels of per capita output, but not per capita consumption.