2. Using the open economy macroeconomic model, explain graphically and in words that how following changes will affect financial market (market for loanable funds), FX market and trade balance: a. Fiscal policy b. Trade policy c. Political instability and capital flight

2. Using the open economy macroeconomic model, explain graphically and in words that how following changes will affect financial market (market for loanable funds), FX market and trade balance: a. Fiscal policy b. Trade policy c. Political instability and capital flight

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

2. Using the open economy macroeconomic model, explain graphically and in words
that how following changes will affect financial market (market for loanable funds),
FX market and trade balance:
a. Fiscal policy
b. Trade policy
c. Political instability and capital flight

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