Consider a small open economy. Suppose there is an increase in the expected future marginal product of capital. Without other changes, we can expect that saving curve will shift to the left and the current account balance will decrease. saving curve will shift to the right and the current account balance will increase. investment curve will shift to the left and the current account balance will increase. investment curve will shift to the right and the current account balance will decrease.
Consider a small open economy. Suppose there is an increase in the expected future marginal product of capital. Without other changes, we can expect that saving curve will shift to the left and the current account balance will decrease. saving curve will shift to the right and the current account balance will increase. investment curve will shift to the left and the current account balance will increase. investment curve will shift to the right and the current account balance will decrease.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Consider a small open economy. Suppose there is an increase in the expected future
marginal product of capital. Without other changes, we can expect that
saving curve will shift to the left and the current account balance will decrease.
saving curve will shift to the right and the current account balance will increase.
investment curve will shift to the left and the current account balance will
increase.
investment curve will shift to the right and the current account balance will
decrease.
Transcribed Image Text:Suppose a Canadian oil company buys insurance from the UK to insure its oil Plgs.
How should we record this transaction?
Credit the current account and debit the capital account.
Debit the current account and credit the capital account.
Debit the current account and debit the capital account.
Credit the current account and credit the capital account.
Dago 12 of 35
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