Consider a small open economy that takes the world real interest rate as given. Suppose the world real interest rate is less than the country’s autarky real interest rate. Which of the following is TRUE? a. Domestic saving exceeds domestic investment b. There is capital outflow c. There is excess demand for capital d. None of the other options

Q: What are the trends regarding foreign direct investment (FDI) in the world economy

A: Foreign Direct Investment refers to the investment done by an individual, or company from one…

Q: Draw a diagram for Saving and Investment in a small open economy. Assume the world real interest…

A: Savings and investment is one kind of economic process in which savings is one kind of money which…

Q: Canada is an emerging market economy. True False

A: Emerging Market Economies are such economy that are on their path of development. Such economies are…

Q: China is playing a growing role in the world economy. It is one of the world's fastest growing…

A: Country C is the largest exporter and is the fastest growing countries in the world. The country…

Q: Greenfield investments are different from the Acquisition of a company in the host country. Are you…

A: For a nation to develop smoothly, foreign capital is necessary as not only erases the huge…

Q: Explain briefly what international investment law does. Why is it important? Is it a good or bad…

A: Investing means putting money into something with the prospect of a future benefit or return. To put…

Q: Assume prices are flexible, factors of production are fully employed in both countries and there is…

A: In small open economy,due to increase in investment demand,aggregate demand would increase but to a…

Q: In your opinion, how can we attract new foreign investors to our country in order to develop our…

A: Foreign investment refers to a situation when the individual from a foreign country invest in…

Q: Consider a small open economy that takes the world real interest rate as given. Suppose that…

A: A small open economy is characterized as an economy of limited size, lacking the ability to…

Q: what is the importance of Foreign direct investment (FDI)  to an agriculture-producing country…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: If the world real interest rate falls, then a country that is an international lender Select one: O…

A: If the world real interest rate falls, then a country that is an international lender Select one…

Q: On what two factors does the return on a foreign investment depend?

A: Foreign investment can be referred as the investment on the asset and domestic firm of another…

Q: Fully examine the circular flow diagram of an open economy. Apply the circular flow diagram to a…

A: The circular flow diagram is a visual illustration of the flow of money,  products and services…

Q: Which of the following statements is true for the small open economy? a.Saving is not always equal…

A: A small open economy is a country that cannot influence the world price. A small economy is usually…

Q: Show the effects of an increase in the world interest rate on the market for loanable funds and the…

A: The market of loanable funds is base in the concept that the market interest rate is determined by…

Q: Government has resorted to external borrowing to fund government projects such as infrastructure and…

A: Foreign borrowing refers to the borrowings from foreign lenders to fund the various expenditures of…

Q: Does Foreign direct investment benefit all stakeholders. Discuss

A: When an investment is made from a party being in one country into business in another country having…

Q: Consider a small open economy that takes the world real interest rate as given. Suppose that…

A: An interest rate is the cost or price of borrowing money, usually expressed as a percentage of the…

Q: When there are two large open economies in the world, if capital goods become relativel cheaper…

A: An economy that engages in international trade and capital flows is said to have an open economy. In…

Q: When might a country’s level of economic development mislead an international investor?

A: An investor is the one putting money into a business for getting a financial return.

Q: Suppose there is a slowdown in economic activity worldwide and many foreign governments decide to…

A: An increase in government spending has a significant impact on the economy.

Q: e comment! Since more capital allows more output to be produced, it is always better for a country…

A: we know As Capital, in the eyes of an economist, usually refers to liquid assets of it. To put it in…

Q: Even though the US offers very low interest rates, the U.S. dollar has been appreciating with…

A: Interest rate is the rate at which the bank offers loans to the public. A high-interest rate would…

Q: When a nation’s currency suddenly loses value, the ________ may step in to buy the afflicted…

A: International monetary fund is a financial institution and it has around 190 members. Its major…

Q: A country has a net foreign investment of $-5 Trillion? What does this mean?

A: Balance of Payment refers to the systematic record of all economic transactions between the…

Q: Which of the following statements does not belong to the main benefits of foreign direct investment…

A: Foreign Direct Investment (FDI) is one of the activities performed by an open economy economy that…

Q: Consider a developed country, Country A. Assume that the trade volume (exports + imports) with…

A: Trade and economic development are closely interconnected. In many economic models, as a country…

Q: Since more capital allows more output to be produced, it is always better for a country to have (and…

A: Capital, in the eyes of an economist, usually refers to liquid assets. To put it in another way,…

Factor Models

Many attributes might be related to an asset's risk, including market capitalization (size), dividend yield, growth, price-earnings ratio, etc. The use of these traditional descriptors, however, presents a few problems: